How to Increase CIBIL Score with a Gold Loan

Can a gold loan really help improve your credit score?

If you are trying to boost your credit score, a gold loan might just be the option you have not thought about yet. Not only does it give you quick and easy access to funds, but it can also make a positive difference to your credit profile.

But before we get into how it works, let us first understand what a CIBIL Score actually is. Think of it as a number that tells lenders how trustworthy you are with credit. This score ranges between 300 and 900, and the higher it is, the better your chances of getting loans and credit approvals.

Your score depends on a few things—like paying your EMIs and credit card bills on time, using credit smartly, maintaining different types of credit, and having a long credit history. Do these right, and your score goes up. On the flip side, late payments, defaults, or overusing credit can pull your score down.

How can a gold loan help improve your credit score?

Here are the key ways gold loan can help improve credit score:

Timely repayment of your loans

Making your gold loan repayments on time can help you boost your credit score. Your payment history is a crucial factor in determining your credit score. When you make timely repayments, it demonstrates to lenders that you are responsible and trustworthy in repaying your debts.

Diversity of credit can boost your credit score

Having a variety of different types of credit can enhance your credit score. Taking out a gold loan can contribute to diversifying your credit mix and improving your credit score. Relying solely on one form of credit, such as credit cards, for instance, may hinder your credit score.

In India, a CIBIL Score is a crucial factor in determining your loan eligibility. By taking out a gold loan and making timely repayments, you can demonstrate your ability to manage and repay debt responsibly. This positive repayment behaviour is a crucial factor in building a strong credit profile. So, if you're looking to address your financial needs while also boosting your credit score, a gold loan can be an excellent choice.

Key benefits of a gold loan

Other benefits that make gold loan an ideal form of borrowing are:

•Competitive interest rates

The most important factor to consider when getting a gold loan is the interest rate charged on the loan. While different lenders have different rates, it is important that the rate is reasonable and affordable. At Bajaj Finserv, you can get a loan against your 18-22 karat gold jewellery with gold loan interest rates starting at 9.50% to 24% p.a. Another added advantage of taking a gold loan is that with a longer repayment tenure you can benefit from a lower rate of interest.

•Multiple repayment options

With gold loan, you also get the freedom to choose a gold loan repayment tenure as per your convenience. Bajaj Finserv offers you multiple repayment schedules to repay your loan. With us, you can choose to repay your loan monthly, bi-monthly, quarterly, half-yearly, or annually.

•High gold loan per gram

A gold loan per gram is a loan that is issued against a certain weight of gold. Simply put, instead of taking out a loan for a fixed amount, you take out a loan based on the value of your gold. With a Bajaj Finserv, you can get up to 85% of the estimated weight of your pledged gold jewellery with loan amounts ranging from Rs. 5,000 up to Rs. 2 crore. The amount you can borrow against your gold jewellery depends on the per gram rate of gold.

•Free insurance of gold

Another added advantage of gold loans is the free insurance of your gold jewellery. The pledged gold jewellery is stored in secure vaults under constant surveillance. This ensures the safety of your gold jewellery, giving you the needed peace of mind.

•Easy eligibility parameters

These loans come with easy to meet eligibility parameters. As an Indian citizen between 21 and 80 years of age, you can easily apply for a gold loan with just your KYC documents. The list of documents includes any one of the following proofs of identity and residence:

• Aadhaar Card
• Voter ID card
• Passport
• Driving licence
• NREGA job card
• Letter issued by National Population Registration

PAN card is not required. However, if you apply for a gold loan above Rs. 5 lakh, you will have to submit your PAN card.

If you are considering a gold loan, you can use our gold loan calculator to determine the loan amount and interest rate that align with your needs.

Turn your gold into instant support—handle any expense with ease. Check your gold loan eligibility and access funds when you need them most.