What happens to my gold if I am unable to repay the loan?

If a gold loan remains unpaid, financial institutions typically remind you through calls, SMS, emails and notifications. If you are unable to repay a gold loan, the financial institution may take the following actions:

1. Penalty: If interest payments are not made by the due date, despite sending reminders, the financial institution may impose penalties.
2. Auction of Gold: If the loan remains unpaid after the notice period, the financial institution may auction the gold to recover the outstanding amount. The auction process is usually conducted transparently, and the financial institution is required to inform you about the auction date in advance.
3. Recovery of Loan Amount: The proceeds from the auction are used to recover the outstanding loan amount, including any accrued interest and other charges.
4. Excess Amount: If the auctioned amount exceeds the loan dues, the surplus is returned to you. However, if it is less than the outstanding loan, you may still be liable to pay the remaining balance.

It's important to stay in touch with your financial institution if you're facing difficulties in repayment, as they may offer options like loan restructuring or extending the repayment period to help you avoid auctioning your gold.