The facility of loan is made availed to people to fulfill the requirement of the funds for a certain purpose. There are different types of loans available in the market as a gold loan, personal loan, property loan, vehicle loan, etc. according to the preference of the borrower; they can get the best one. Out of all of them, goal loan has become the most popular. India is the place where almost everyone has something or the other in gold. It is one of the precious items that can help in fulfilling the requirement for a certain situation.
Many companies are providing gold loan payments online this has made it very convenient for people to take help of this and get the best results. But there are some situations that the borrower might not be able to repay the gold loan on time. Here are some of the situations that might arise if the gold loan is not repaid on time. Let’s have a look at them.
- Repeated reminders: The gold loan borrowers will keep on getting repeated reminders from the gold loan companies. The reminders can be in the form of e-mails, letters, calls, and even messages. The remainder will be having the outstanding loan amount and even the due date. If the person exceeds the last due date, the penalty amount will also be added to the loan amount.
- Penal interest is imposed: The gold loan lender will impose the penal interest, which is an additional interest that is paid for the outstanding amount for a different life span. The interest rate can range from 1% to 7% per annum, and the amount of interest will depend upon the months the person has missed the payment.
- Gold is auctioned: In the gold loan, the lenders keep the gold valuing more than the amount of the gold loan as the collateral security. Even after a lot of reminders to the borrowers, if there is no repayment of the loan after a fixed number of months. The lender will auction the gold kept as collateral security. It will be a great loss for the borrower as the amount that he might have paid will also go in vain.
- Affects the credit score: It is quite true that gold loan borrower if are unable to repay a gold loan. Strict action will be taken on them that will also include legal actions. This will reduce the credit score of the person. The low credit score will make it difficult to get any type of loan in the future.
So it is always better to repay the gold loan amount on time so that things can be kept on the positive track even in the future. If you are interested in getting a gold loan, you can easily look for the best gold loan in Delhi that provides this loan facility. This way, the person can raise the money that is required for tough situations.