Does Taking Gold Loan Affect My Credit Score?
Does gold loan affect your credit score? Read our blog to clear any doubts that you might have for gold loan.
Gold Loan is a loan wherein gold jewellery is provided as collateral security. Gold Loans are offered by nationalized banks, private banks, and other financial institutions at affordable interest rates. Compared to other loans which may stipulate some fix terms and conditions for end-use of funds, Gold Loans provide flexibility to the customers to use the funds for any purposes like education, medical urgency, wedding, etc.
The way in which you handle and manage your credit payments are reflected in your credit score (a numeric summary of your credit history). Delayed payments of any loan EMIs, credit card bills, etc will have a negative impact on your credit score. Poor credit score can make difficult for you to take any additional loans.
People who are in need of money, but have a poor credit score, can use Gold Loan as an opportunity to improve their credit score. Several financial institutions offer loans if sufficient collateral is pledged, in this case, gold ornaments/articles in a range of 18-22 carat. Prompt repayment of any loan can boost your credit score significantly, and Gold Loan is no different. Hence, a Gold Loan taken and repaid early or on time will have a more positive impact on your credit score rather than taking an unsecured personal loan. Notably, financial institutions do not see the delayed payment of secured loans especially Gold Loans as negatively as delayed payment of other unsecured loans is seen.
Further, the interest rate on other unsecured loans may be higher than the gold loans. Hence, Gold Loans may prove to be cost-efficient as well.
Read More Here: Things to Consider Before Taking Gold Loan
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.
