If a gold loan applicant has had his loan application rejected by Manappuram Finance, then what could be the reasons for it? While applying for Manappuram gold loan online or offline, there are a few things to keep in mind, like the eligibility criteria, amount and type of gold, documents required etc, so that
There are many reasons why a loan against gold application could get rejected, and to know more about these causes, read the post below.
- Unsuitable Type of Gold
Manappuram Finance may not accept gold assets other than bank-purchased gold coins. Gold jewellery is acceptable. If an individual wants to apply for a gold loan, he must have at least 15 grams of gold jewellery or gold coins not more than 50 grams. The purity of gold must be not less than 18 carats and can be up to 24 carats. More the purity of the gold and its weight, greater will be the loan amount one would be eligible for.
Jewellery that is gold plated will not be acceptable. Precious stones and materials in the ornaments will not be counted in calculating the loan amount. If someone wishes to use the loan for agricultural purpose, the he must furnish proof of the agricultural activity.
- Not Enough Gold Asset
In case a person wants Rs. 2 lakhs as loan, but the amount of gold he has does not fulfil the criteria for getting Rs. 2 lakhs as loan, then his loan application can be rejected. Manappuram Finance keeps a margin of 25 percent when calculating the loan amount. For instance, if the gold asset is worth only Rs. 1.5 lakhs after evaluation, then the person will be eligible for only this much amount and not Rs. 2 lakhs. It is best to ask for a loan amount that one is eligible for and nor anything more than capacity.
- Documentation Not Done
Aadhar card and PAN card are the documents required for a loan against gold. Any other identity and residence proof may even do as per the guidelines of the NBFC. If these are not submitted in time then the loan application can get rejected. The application has to also submit residence proof, recent passport-size photographs with duly signed and filled application form. Local residence proof may be mandatory. Until the documentation is not completed, the loan cannot be approved.
- Relationship with Manappuram
Banks and NBFCs have a set of rules for every loan scheme. If a person in the past, has had defaulted in repayments with Manappuram and been on bad terms with this institution, then there is a risk of having the gold loan application rejected. Thus, individuals must keep a healthy relationship with financial organizations if they plan to apply for a gold loan with any.
Why Should One Repay Loan on Gold in Time?
If a person defaults at repayment of a gold loan even after continuous reminders and notices, then it is possible that the NBFC will auction off the jewellery/coin pledged. It may seem that liquidating the pledged asset and paying the outstanding amount with it as a viable option, in reality it is not a wise decision at all. Auction of the gold ornament will that the borrower lose possession of the asset, thus will never be able to take future loans on it nor liquidate it for personal reasons or treat it as investment.
When sanctioning the loan, Manappuram can provide loan up to 75 percent of the gold’s value only. Thus, losing the gold ornaments will mean an additional loss of 25 percent as well. This is why one should repay the loan on time as per the repayment schedule so that the financial institution returns the gold in time. The person’s credit score will remain strong if regular payments are made, and vice-versa.
The provided information above will make individuals aware of the reasons to gold loan rejection by Manappuram Finance, and what to keep in mind when applying for the loan with this NBFC.