Gold Loan After Death

What happens to Gold Loan After Death of the Borrower?

Isn’t it an intriguing question? Nobody can predict death, but everyone has to die someday. Suppose you took a loan and died during the repayment period. What will happen then? In Gold Loan, gold valuables are kept as a mortgage in the bank. Gold trading has been prevalent for centuries. In cases of financial misery, bankruptcy, medical emergencies or personal needs, your Gold possessions can come in handy for instant availability of cash. Gold Loan has the fastest processing time and low-interest rates and can get approved in a single bank visit within few hours. Loan approval is easy, but debt repayment isn’t an easy job for everyone. One has to put a lot of efforth into repaying an indicated amount towards the end of every month. The family member of the deceased may have to bear the repayment, which will lead them to both emotional and financial turmoil. We should first know about the Gold loan to get the answer to this question.

The Gold Loan

The Gold loan is a loan where one has to keep his/her gold possessions collateral against availing cash. The gold loan can be acquired by anybody irrespective of income or occupation. Gold is the only metal that has its a significant place in the market for centuries. Gold is the most possessed metal throughout the world, which makes it implicitly demanding. The gold loan interest rate is low and has a high processing time. The gold loan can be availed within few hours after completing an application. After successfully repaying the loan amount, your gold valuables are safely returned to you.

While applying for a Gold Loan, the mortgaged gold is put under gold loan per gram test by Bank Authorities to check the gold’s composition and purity. Gold purity test is essential for getting the loan approved. Gold purity test and Document verification are two important things to get your loan approved. The loan amount gets sanctioned on the weight and quality of gold. A repayment period of 12-24 months can be given to the borrower depending on the loan amount.  A tenure period can be chosen by the borrower while applying for the loan. The gold loan comes with lower interest rates and nominal foreclosure charges. 

GOLD LOAN @ 0.49%*



How does Bank Recover the loan?

When you are deceased, your family members will be liable to pay the loan. But if you are insured, then the insurance company will pay the remaining loan amount on your behalf. Nowadays, every loan comes with insurance. If you don’t have insurance and your family members cannot repay the debt amount within the tenure period. Your gold possessions would be taken into auction by Bank representatives. Your Gold will be melted, and the bank will recover the loan amount. It’s always good to have insurance that will cover all your repayment debts after death and puts less stress on your family. As Gold is the most possessed and loved metal, nobody would like it to lose. Primarily, Bank asks the guarantor to repay the loan amount as it is his/her sole responsibility. As Gold is an important asset, a Guarantor is not required to get the Loan approved. A Loan extension period is also provided in case you miss any gold loan repay option. After an extension of the tenure period, if you are unable to repay the debt, then the bank recovers the amount by taking your assets. 

What happens when you fail to Repay the Debt?

Gold loans are simple to obtain and convenient in the sense that banks and financial institutions offer a variety of repayment options. Regrettably, due to unforeseen circumstances, one may be unable to repay their loan on time. If a loan is not paid on time, it can have consequences that the borrower may not be aware of but will learn about through this post.

Penalties: The company is obligated to charge a penal rate of interest on the loan amount beginning on the loan’s due date. However, it does not apply to agricultural loans up to certain limits.

Reminder text messages/calls/letters: In the event of a persistent overdue, the company is required to send periodic SMS reminders/calls/emails/letters to remind them of the outstanding loan amount. To avoid major contingencies, a borrower can reset their repayment schedule by visiting the branch office where they took the loan.

Auction: If the loan is not fully repaid within the loan period, the company has the right to sell or otherwise dispose of the gold through public auction at the borrower’s risk and expense. However, the lending institution will notify the borrower two weeks before auctioning off the pledged gold.

Influences Credit Score: One thing that all gold loan borrowers should be aware of is that defaulting on any loan, including a gold loan, will have a negative impact on your credit score. A credit score is a three-digit number that indicates an individual’s creditworthiness based on his or her income and credit history. Organizations such as CIBIL, Experian, Equifax, and High provide it.

It’s not just gold; before taking out a loan, the borrower always signs terms and conditions that extend liabilities to his family. If the borrower dies, the lender will not hesitate to enforce the relevant conditions in order to recover principal, interest, and, if applicable, penal interest. If the borrower dies, the legal successors’ liabilities continue even after the borrower’s death.

What is Gold Loan Insurance?

Gold loan Insurance helps you repay the loan amount in specific scenarios where you are injured or suffering from the disease. The Gold loan insurance policy covers the cost of Gold jewelry for individuals. This loan ensures to pay the coverage for your gold ornaments kept as mortgage until the time of closure of Gold Loan and release of your Gold ornaments. This insurance can now be available on several other loans as well. To know more about this, you can refer to the “Dial-a-Bank” website. 

GOLD LOAN @ 0.49%*



Gold Loan After Death – FAQs

✅ What is the document required to claim a gold loan and its asset?

There are four major documents required in Gold Loans. These documents include the death certificate, Session of Certificate, Probate of WILL, and Claim Application form.

✅ What is Gold Loan Insurance?

Gold Loan Insurance if used to repay the loan amount.

✅ What happens when you can’t repay the Gold Loan?

If you can’t repay the Gold Loan, then there will be penalties, auctions, and influencing credit scores, and there will be text messages from banks.

✅ How to take over gold loan after death of borrower?

After the death of the borrower either co-applicant or grantor should repay the loan. Or else the family members can also repay the loan. If no one repays the loan then the banks seize their property.

✅ Who will pay after me(borrower) for the gold loan?

After the death of a borrower who can pay a gold loan. For this question, the borrower may previously decide and at the time of taking a loan, the borrower can decide about that. In this way, you can use these pay after me for gold loans.

✅  Are Gold Ornaments safe if the borrower dies?

Yes, the gold ornaments are safe with banks. But if no one repays the loan then the bank may use their gold for repayment of the loan.

✅ Is there any tenure relaxation in a gold loan?

Yes, banks may use these tenure relaxation if the borrower dies. The family members of the borrower can use repay the loan with tenure relaxations.

✅ Do banks take gold ornaments in case of borrower’s death?

Yes if no one repays the gold loan then the bank has the right to make gold ornaments.




I have read the Privacy Policy & Agree to Terms & Conditions and authorize Dialabank & its partner institutions to Call or SMS me with reference to my application.