What Happens to my Gold Jewellery if I am Unable to Pay Back my Gold Loan

What you should know about delayed gold loan payments

A gold loan is a great support when you need urgent funds. But sometimes, unforeseen situations may make it difficult to repay on time. In such cases, lenders usually start with reminders, followed by default notices, giving you enough chances to clear your dues. If the loan remains unpaid despite these reminders, the lender may recover the outstanding amount by auctioning the gold jewellery you pledged. To avoid this, it is important to track repayment dates and communicate with your lender if you face difficulties. Some lenders even offer flexible solutions to help you manage repayments smoothly.

Gold auction process 

Here are the steps involved in the auction process:
 

Default notices

Even after multiple texts and phone calls, if there is a delay in the scheduled repayment, a notice is sent to your residential address. The first default notice is sent 15 days after a delay in repayment.
 

Pre-auction intimation notice

If the outstanding amount remains unpaid even after multiple reminders and the default notice, you will receive an Auction Intimation Notice. This notice is sent 21 days after the initial default notice, informing you of the upcoming auction.
 

Advertisement for conducting the auction

An advertisement is published in two newspapers – one in a local newspaper (vernac) and the other in a national daily. As per industry guidelines, the auction takes place on the scheduled date. Re-auction will be conducted if public auction does not take place on the day of auction.
 

Guidelines to conduct auction

The pledged gold jewellery will be displayed to auctioneers as per the pre-approved terms and conditions. A minimum amount will be fixed to be recovered from the bidding of each pledge based on the valuation of gold jewellery.
 

Documentation of auction event

A record of the entire auction process is duly maintained for further reference of all parties involved.
 

Delivery of gold jewellery

The successful bidder gets the gold jewellery that they have purchased within the period as agreed.
 

Loan adjustment

The auction sale proceeds will be adjusted against your loan account. If the sale proceeds are less than the total dues, we shall send you a demand notice for recovery of the balance dues. In case, the sale proceeds are more than the total dues, surplus amount shall be refunded to you.
 

Communication to the borrower

After the auction, you will receive a detailed report providing information about the proceedings. If there is any surplus or deficit amount resulting from the auction, we will send you a letter notifying you of the same.