Missed Your Gold Loan EMI? Here's What Happens Next

Have you ever missed your gold loan EMI from Muthoot Finance and other financial institutions and thought, "What happens next?" Don't worry because the process of defaulting on gold loans in India is straightforward. Find out what to expect after failing to repay your gold loan EMI.

What Happens Immediately after Defaulting on Repayment?

Late Fees Applied First

When you fail to repay on time, the lender applies late fees, which may range from 1%-2% per month based on the total amount that's still owing. Pay immediately before the late fees stack up.

Reminders through SMS or calls but no need to worry.

Interest Continues to Accumulate

The interest on gold loan increases daily based on the amount of money that isn't settled. In case of a 12% p.a. gold loan of ₹50,000 from Muthoot Finance, an extra ₹150-200 will be charged monthly.

Gold Loan Closing: Auctioning of the Collateral

What is the Gold Loan Closing Process?

After 3-6 months of defaulting on your gold loan, you'll receive a letter, giving you 15-30 days to make repayment. If you don't take the necessary actions, the lender revalues your gold and then auctions