5 MinsApril 20, 2022
Ayesha Salim, 26, wants to buy a house in the coming seven years and has started saving for it. She knows she will have to fund a significant part of the purchase with a home loan. Ideally, a CIBIL score over 750 would help her qualify for a
home loan easily. But she does not have a good credit score because she has no credit history. She does not have a credit card and has never availed any loan. That’s when her father suggested that she avail a gold loan.
A gold loan is a loan that a consumer takes by pledging their gold as collateral. This has a greater chance of getting sanctioned because the bank has security against the loan. Once her gold loan is approved, Ayesha can use it to build her CIBIL
score. This can be achieved in the following ways:
1. Regular and swift EMI payments: To improve your CIBIL score, make all the repayments towards the loan within the time frame fixed by the bank. This will have a positive impact on your CIBIL score.
2. Adjust repayment: If for some reason, Ayesha misses a couple of EMIs, she must ensure that the EMI amounts don’t become so huge that she is unable to clear them and defaults on her payment. In such a case, the bank
may sell the gold articles kept as collateral to recover the remaining of the loan amount, which will reflect poorly on her CIBIL score.
3. Take a loan only for the amount needed: There are a lot of gold loan calculators available today. Ayesha should use them to get an estimate of the loan and EMI amounts. This will ensure that she will have no problems repaying
the loan. In other words, she can check her loan repayment capability before applying for a gold loan.
[Also Read: Need funds in a hurry? Put your gold to work]
4. Avoid collateral auctions: To keep her CIBIL score intact, Ayesha should ensure that she repays her EMIs on time and avoids the auction of her gold kept as collateral.
5. Early repayment: Another way to improve her CIBIL score is by making an early repayment of her loan. If she has a loan tenure of 18 months but clears it within 14 months, it will positively affect her credit report,
which will, in turn, help boost her CIBIL score.
Gold Loans give you the ability to secure your financial goals safely and assuredly. While you can avail a gold loan even with a low CIBIL score, it is a means to build credit history and improve your CIBIL score, provided that you make regular
repayments on time.
Axis Bank offers Gold Loans starting at Rs. 25,000 up to Rs. 25 lakh. The tenure of the loan can be between 6 and 36 months. These loans can be disbursed on the same
To get a Gold Loan, visit your nearest Axis Bank branch. Know more about Gold Loan interest rates.
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