How Gen Z and Millennials Are Changing the Gold Loan Game

Learn about the trends and behaviors of Gen Z and Millennials that are influencing the industry, and how lenders are adapting to meet their needs. Get ahead of the curve and read this article to stay informed on the future of gold loans!

17 Mar,2023 12:57 IST 2681 Views
How Gen Z and Millennials Are Changing the Gold Loan Game

Gold has been accumulated in Indian households for centuries as a security measure that can be used and sold in difficult times. At many significant and auspicious occasions, such as festivals and weddings, gold is either purchased or gifted in most Indian households. However, while it is kept at home or in a bank locker, physical gold does not earn interest.

With the emergence of Gen Z and millennials—essentially people in the 20- to 40-year age bracket—bringing about a behavioural shift and with the evolution of a digital economy, more ways have come up to monetize gold as a valuable asset.

Thanks to a change in peoples’ attitude and approach towards credit over the years, gold is now seen as an asset that can be used to fund needs other than financial emergencies. Examples include paying for education, a foreign vacation, or a dream wedding.

Gold loans have become a popular way for Gen Z and young millennials to raise money for their immediate personal needs due to their easy accessibility and the rapidly expanding digitisation of gold markets.

Indeed, Gen Z and millennials are now emerging as a dynamic category of borrowers looking to use their latent gold assets to upgrade their lifestyle and meet their financial needs.

What Makes Gold Loans Attractive to Gen Z and Millennials?

A gold loan is a secured loan that a borrower obtains from a bank or non-banking financial institution by pledging their gold to the lender as security. The gold jewellery is temporarily held by the lender, who grants the loan to the asset’s owner. The jewellery is given back to the borrower after repayment of the borrowed funds.

Unlike the earlier generations that took a guarded and safe approach towards their savings and assets like keeping their gold at home or in a bank locker, Gen Z and millennials are keener to use latent assets and gain from them as well.

Cheaper Than Unsecured Debt

Gold loans have a number of benefits over some other loan types, particularly unsecured products like credit card debt and personal loans for millennials, who are now taking advantage of this idle asset. A gold loan might even be preferable in some circumstances to a small business loan, which forms a lucrative seed capital for budding entrepreneurs.

Getting The Asset Back

The assurance that the gold will be returned on gold loan repayment of the loan also makes it an attractive option for young borrowers, who do not want to permanently part with their gold jewellery by selling it. In fact, the jewellery can be retrieved as and when needed as per the terms and conditions of the gold loan. It also keeps intact the sentimental attachment to gold that may have been gifted by a loved one or have a fond memory linked with it.
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Easier Approval

As a secured form of credit, gold loans are one of the easiest options for Gen Z and millennials who may have no history of credit. All they require is identification documentation, such as a PAN card or an Aadhaar card.

Everything Online

As Gen Z and millennials are usually on-the-go and prefer digital forms of working especially online banking and hassle-free transactions. As a result, if everything is in order, banks and non-banking finance companies can now quickly complete the e-KYC process and approve a gold loan in under five minutes. The loan can then be disbursed. The borrowed funds are credited to the borrower's bank account and online repayments are also possible.


Gold loans have come up as one of the fastest growing options in the personal loan segment and have proved to be a game changer driven by the Gen Z and millennials, who prefer the ease of obtaining such short-term loans with favourable terms.

Young borrowers are increasingly opting for gold loans due to their minimal documentation requirements and quick processing times and also for the fact that their jewellery will remain safe and can be taken back on repayment of the loan.

However, young or first-time borrowers should know that local moneylenders and pawn shops make up a sizable portion of the unregulated gold loan market. So, it is crucial for them to choose a reputable and well-known lender like IIFL Finance for a gold loan rather than a local moneylender who will charge extremely high interest rates.

Like the majority of lenders regulated by the Reserve Bank of India, IIFL Finance authorises loans up to 75% of the gold’s market value, depending on the grade of the metal.

In addition to providing the best value for the gold, IIFL Finance makes gold loan process simple and fast because of its customer-focused approach. Customers can also fill out an online loan application on the IIFL Finance website for approval of their gold loan within a few hours.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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