How to increase CIBIL Score with a Gold Loan

Here’s how a loan against your gold jewellery can help you improve your credit score.
How to increase CIBIL Score with a Gold Loan
2 min read
10 July 2023

Are you looking for a way to improve your credit score? One option you may not have considered is taking out a gold loan. Not only can a gold loan quickly and easily provide you with the funds you need, but it can also have a positive impact on your credit score.

Before we dive into how a gold loan can help improve your credit score, let us first understand what a CIBIL Score is.

A CIBIL Score is a number that reflects your creditworthiness, based on your credit history and repayment behaviour. Lenders use this score to assess your creditworthiness when you apply for a loan.

Your CIBIL Score can be anywhere between 300 and 900. The higher your score, the better your credit profile is considered. Several factors contribute to your CIBIL Score, including paying back loans and credit card bills on time, using credit responsibly, having a variety of different types of credit, and having a longer credit history. These factors have a positive effect on your CIBIL Score. However, if you make late payments, default on payments, use a lot of credit, or have a short credit history, your score may be lower.

How can a gold loan help improve your 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.

 Read also: How to improve CIBIL Score by taking 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 to 22 karat gold jewellery with gold loan interest rates starting at just 9.50% 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 75% 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 70 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 proof of identity, along with a proof of 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. To apply for a gold loan, visit https://www.bajajfinserv.in/gold-loan.

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Frequently asked questions

What is a good CIBIL score range required for a gold loan?

Availing a gold loan doesn't require any minimum credit score. You just need to provide your 18-22 karat gold jewellery and basic KYC documents to get the loan. The quality of your pledged gold has a great impact on how quickly your loan gets approved.

How to get a gold loan without CIBIL score?

As the loan is secured against physical gold jewellery, you do not need a CIBIL score to avail of the loan. All you need is your 18-22 karat precious gold jewellery.