What happens when you fail to pay a Gold Loan

In this world of progress, many banks and financial institutions provide funds to the customers for their various financial needs but somehow particular loans are provided with some restrictions also. In the same way, if the customer is not able to meet the eligibility criteria laid as per banks norms and rules the application of loan may not be accepted. So applicant must fulfill the conditions laid under gold loan eligibility criteria.

Loans are the necessary thing for any person who wants to fulfil their needs with the peasant and immediate hour of need. And Gold loan acts as best friend to help in the hard times by increasing your liquidity or provide you the funds by the deposit of gold ornaments with banks. Many leading banks and financial institutions dealing in gold loan provides various benefits and facilities to the users.

Gold loan is provided without any special charges and additional fees, banks generally charge interest for the time being you avail the gold loan, there is no to provide CIBIL score for application of gold loan, you need to provide valuable gold ornament or jewellery sets which have greater value than the required loan amount. The banks generally provide 70-80% of amount against the gold value. The application of gold loan is just instant which means it takes a few  minutes to provide you with the gold loan after the KYC of the customer and valuation of gold ornaments by banks,

What happens if you not able to pay the gold loan interest, the banks have the rules and norms which they generally follow:

• Banks may charge penalties and late interest payment charges, they have the rights and actions against you for penalising you for late-payments and rights actions against to demand the pending due interest.

• Banks generally remind the customer time and before the due date of interest payments, they send notice ultimately against the action to be taken against you if are not able to provide interest due.

• Gold loan bank ultimately leads to taking action to auction the gold deposited by the customer so that they recover the principal and interest due against a customer. If the interest payment is knot done by the customer within the time period provided, the gold sets and ornaments may lead to public auction at the risk and heavy cost of the borrower. However, the banks may provide you with the notice of auction prior before the due auction date of gold deposited by you.

The gold loan lenders may ultimately auction the gold ornaments of defaulters who are not able to pay back the loan amount and due interest timely. Moreover, it may reflect your credibility in a negative position.

So, the applicant of gold loan must ensure they are paying the interest on gold loan amount duly at timely payback the loan amount before the time period of a gold loan.

Must Read-Gold loan Repayment schedule.