Does a Gold Loan Affect your CIBIL Score? - Loan Trivia


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Friday 17 March 2023

Does a Gold Loan Affect your CIBIL Score?

In financial emergencies, Indian residents often pledge their gold assets to obtain a loan from a financial institution. However, willing applicants should know that a gold loan can affect the CIBIL score. Continue reading to know how gold loans affect CIBIL scores. 

How does gold loan affect the CIBIL score?

Individuals with an urgent need for money can pledge their gold ornaments and receive a sizable amount from a lender, despite their low CIBIL score. A borrower’s repayment history and timely repayment behaviour have a positive impact on the CIBIL score. Hence, prospective gold loan applicants should ensure to repay their monthly instalments promptly. This will help them boost their CIBIL score. 

On the other hand, one should also know that failing on a single monthly instalment can negatively impact the credit score and reduce the chances of future loan approvals. 

Individuals looking forward to applying for a gold loan in Erode, or any other city, should know that CIBIL score can increase with regular and timely repayments. On the other hand, this score tends to decrease due to hard inquiries. 

Further, defaulting on a gold loan gives lender the right to dispose of the pledged gold and recover unpaid dues. 

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