Steps to Take When You Have Defaulted on Your Gold Loan EMIs

Date of Published: September 13, 2023

Gold loan is the most convenient and easily available mode of loan for the borrower. Borrowers who have poor credit histories and credit scores can also apply for this loan because of its lenient qualifying requirements and conditions. Additionally, lenders offer flexible repayment terms so that clients can easily repay the loan amount. But our life is unpredictable and there may be times when we can find ourselves struggling to make our gold loan EMI payments. Defaulting on your gold loan can be a stressful situation, so it’s important to know that there are steps you can take to address the issue. 

Here are some practical steps you can take when you have defaulted on your gold loan EMIs.

Assess Your Financial Situation

The first step is to evaluate your current financial status. You have to take a close look at your income, expenses, and any other outstanding debts that you may have. if you have a clear understanding of your overall financial situation, it will be easier for you to decide how much money you can actually set aside for your gold loan EMI payment.

Communicate with Your Lender

Communication can solve a lot of problems. It’s important to communicate with your lender as soon as possible, once you have a clear understanding of your financial status. You can reach out to them and explain your circumstances honestly. They will tell you the solution that will work for both of you. Most lenders are willing to work with borrowers who are facing temporary financial difficulties. You can grab the chance to discuss the possibility of restructuring your loan or extending the tenure to reduce the gold loan EMI burden.

Explore Loan Restructuring Options

Many lenders offer loan restructuring options for borrowers who are unable to make their gold loan EMI payments. Loan restructuring means modifying the terms of the loan by adjusting the interest rate, extending the tenure, or even providing a moratorium period where you temporarily halt EMI payments. This helps to reduce the immediate financial strain and gives the borrowers some breathing room to get back on track.

Consider Gold Loan EMI Payment Moratorium

Your lenders can offer a moratorium period during which you are not required to make any gold loan EMI payments. This is a helpful option if you’re facing a temporary financial setback. However, keep in mind that interest may continue to compound during the moratorium period, and you have to resume EMI payments once the moratorium ends.

Utilize Your Gold Loan EMI Calculator

You should use a gold loan EMI calculator when you’re looking to restructure your loan. These calculators help to estimate the EMI amount based on different interest rates, tenures, and principal amounts. You can evaluate the feasibility of different repayment options and choose the one that suits your financial capabilities by inputting various scenarios into the calculator.

Explore Loan Refinancing

In case of default on your gold loan EMIs, you can consider the option of loan refinancing. It involves transferring your outstanding loan amount to a new lender who is offering better repayment terms or lower interest rates. Refinancing helps in reducing your monthly EMI burden and provides you an opportunity to get back on track.

Seek Financial Counseling

Well, if you’re facing it challenging to navigate through your defaulted gold loan situation, try to seek the help of a financial counselor. They can provide guidance and support in managing your debts, creating a budget, and developing a plan to get back on track financially. ValueGold is an amazing platform if you are looking for someone whom you can trust freely. They have an outstanding team of experienced professionals who helps their clients in every aspect related to gold.

Conclusion

In case of defaulting gold loan EMIs, there could be other options like selling the pledged gold and repaying the loan. It is best to consult an expert advisor like Valuegold to obtain professional advice before taking any action whatsoever. Value Gold has a host of other services as well like pledging of gold, cash against gold, among others. If you are stressed, then Value Gold is your best option.