How Can Gold Loans Improve Your Credit Score?
The credit score greatly influences every individual’s financial life. A credit score, ranging from 300 to 900, shows how one handles their overall debt, whether credit card bills or loan EMIs. You need a good credit score to borrow money from a lender. Credit Score of FICO points are a key factor that can affect your possibility of getting a gold loan. These scores are a measure of loan recovery during the gold loan period. These tips can help. You can do so by obtaining a Gold Loan, one of the more popular methods.
If you own gold ornaments or other forms of gold, you can borrow against them for a gold loan. And Following RBI guidelines, you can borrow up to 75 per cent of the gold’s value. It is one of the easiest ways to get funds in a financial emergency since no documents are required for proof of income. Moreover, the lenders do not inquire about your credit history or CIBIL score.
Additionally, you can utilize Gold Loan if your CIBIL score is low. This is how a Gold Loan impacts your credit score.
Credit Score Improvement Methods
An essential aspect of your credit score is your repayment history. Repayment history accounts for 35% of your credit score. You can improve your credit score with a Gold Loan by repaying the loan amount on time. This post will show you how repayments on Gold Loans affect your credit score. Check it out!
Timely EMI Payments
Gold Loans are known for their flexible repayment options. Equated Monthly Installments (EMIs) are one of the most popular repayment methods. In addition, there are Bullet Repayment Methods, Upfront Interest Payments, and Interest Payments at the end of tenure.
When it comes to EMI repayment methods, you will need to pay a fixed amount every month to repay the loan. A portion of the principal and interest is included in this amount. Your credit score will improve over time when you pay your EMIs on or before the due date, as we told you about the importance of repayment history. Paying your EMIs on time will gradually improve your credit score during your tenure.
Gold Loans: How to apply:
If you apply for a gold loan with different lenders, your credit report will be impacted. Such inquiries usually indicate that you are desperate for credit. A gold loan can also be applied for through an online marketplace, such as MyLoanCare, where you can compare rates, check eligibility and calculate EMI for multiple lenders simultaneously without impacting your credit score.
A mix of credit cards
Combining secured and unsecured loans is one of the best ways to increase your credit score. A good CIBIL score will also enable you to apply for unsecured loans. A gold loan is a Lenders and borrowers alike can benefit from secured forms of credit. Several factors make this possible. Among them are easy eligibility criteria such as no income proof or CIBIL Score requirement, online gold facility, higher loan amount, and increasing gold rates. As a result, a gold loan may make it easier for you to access funds in times of emergency and help you establish a credit mix of secured and unsecured loans.
Gold Loan Early Repayment
Gold Loans tend to be short-term loans you can take out according to your convenience. By repaying your Gold Loan before the predetermined tenure, you will improve your credit score. Several lenders don’t charge prepayment charges on Gold Loans. Clearing off your gold loan with early repayment will reflect in your credit report and positively affect your credit score. Therefore, if your finances allow for early repayment of the gold loan, this is undoubtedly one of the best ways to improve your credit score.
Use the Gold Loan EMI Calculator to determine your EMI amount
Keeping your EMI within your repayment capacity is an effective way to make sure you pay your EMI on time. How can you do this? You should be aware to calculate gold loan EMI amount early on to determine if it is within your repayment capacity or not. EMI Calculator for Gold Loans can help you do this. You will be provided with the EMI amount according to the loan amount, interest rate, and tenure of the gold loan.
You’ll be able to manage your finances better if you have a precise estimate of your EMI amount. You are more likely to pay the EMI on time when you have an EMI figure in your head based on your repayment capacity. Missing EMI payments can negatively affect a person’s credit score due to not using this tool. Before opting for a gold loan, utilize Gold Loan EMI Calculator.
Conclusion
Unquestionably, gold loans offer a chance to repair CIBIL. In addition to being easy to obtain, gold loans provide multiple advantages over other forms of credit. There are fewer requirements for eligibility and documentation for a Gold Loan than for a personal loan. Hence, if you also want to get a gold loan from a reliable company, consider Rupeek, the best gold loan provider in the market.