Everyone takes loans in this world. Right from the richest businessman you know to the poorest person your eyes can spot, everyone takes loans for various reasons. Sometimes loans are needed for short term, like to finance a one-time business opportunity, as well as for long term, like to finance a house.

Loans help you to repay the amount borrowed in easy monthly instalments, or EMIs, with a certain rate of interest until a set period.

However, uncertainties have a way of creeping in to everyone’s lives and one could easily find himself/herself in a tricky situation like bring fired from a job, going bankrupt, having an accident, suffering from health problems etc.

And it is usually in situations like these that you tend to default of not repay your loan amount back to the lender.

But companies that are in the market are out there to make money. So, they will try their best to retrieve the money you owe them.

Often loan retrieval turns out to be a traumatic and harrowing experience for both parties involved.

In case of a gold loan, if after repeated reminders the customer doesn’t repay the loan amount, then the borrower (bank or NBFC) will auction the gold you kept as collateral.

Try and avoid this as much as possible. Request the bank to help you restructure the finance of your loan in terms of either tenure or rate of interest.

If you fail to repay your loan for over three months, the borrower can seek legal proceedings against you.

The amount that hasn’t been paid by the due date will start attracting default interest, which keeps on adding by the day, thereby exerting tremendous pressure on a customer.