Union Budget 2026: Gold Loans Could Become More Affordable - Major Updates Expected

All eyes are on the Union Budget 2026 , set to be presented on February 1 by Finance Minister Nirmala Sitharaman. This year’s budget is expected to be particularly important for government employees, farmers, and anyone seeking loans, as borrowing interest continues to rise across India.

The gold loan market is also in the spotlight. Traditionally dominated by NBFCs like Muthoot Finance and Manappuram Finance, banks are now fiercely competing in this segment, giving consumers more options and better rates. NBFCs are hoping the budget will give them new tools to stay competitive.

Gold Loans : Who Borrows and Why

NBFCs point out that gold loans are mainly used by low-income individuals for smaller amounts, usually under ₹50,000. People rely on these loans for medical emergencies, education, farming needs, and small business working capital. While banks enjoy benefits under priority sector lending, NBFCs do not, forcing them to raise funds at higher costs. Granting NBFCs similar priority status could reduce borrowing costs, allowing more affordable loans for smaller towns and rural areas.