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Muthoot Finance Ltd is the largest gold loan NBFC in India and maybe because they have so much money, they do not care abut customer service. This is from my personal experience and I only claim validity from that.
Those who don’t know, Muthoot group, has many loan companies. Muthoot Finance ltd, Muthoot Nidhi, Muthoot Fincorp etc. I am generally going to state the story and reasons why Muthoot is the worse loan company and why no one should approach Muthoot for loan or emi. I will simple state the reasons and you can easily skim through them.
Think Twice Before taking Loan from Muthoot Finance
Muthoot Finance is one of the leading NBFCs in India, offering a wide range of financial products and services. However, before taking a loan from Muthoot Finance, it is important to understand the terms and conditions of the loan, as well as the repayment schedule.
Muthoot Finance offers both secured and unsecured loans. Secured loans are those where you pledge an asset, such as a vehicle or property, as collateral. Unsecured loans are those where you do not pledge any asset as collateral.
The interest rate on Muthoot Finance loans is generally higher than the interest rate on bank loans. However, Muthoot Finance also offers some flexible repayment options that can help you save on interest payments.
Before taking a loan from Muthoot Finance, be sure to compare the interest rates and repayment terms of different lenders. This will help you choose the best loan option for your needs.
Introduction
Muthoot Finance, one of the largest gold financing companies in India, offers loans against gold at attractive interest rates. However, before availing a gold loan from Muthoot Finance, it is important to consider a few things.
The first and foremost thing to remember is that a gold loan is a secured loan, which means that your gold jewellery will be kept as collateral with the lender. Therefore, it is important to ensure that you can repay the loan within the stipulated time period, as failure to do so can result in your jewellery being auctioned off to recover the loan amount.
Secondly, it is important to compare the interest rates offered by different lenders before availing a loan. Muthoot Finance offers competitive interest rates, but there may be other lenders who offer lower rates. Therefore, it is important to shop around before availing a loan.
Thirdly, it is important to remember that gold loans are short-term loans and are meant to be repaid within a year. Therefore, it is important to consider other options such as personal loans if you need a longer repayment tenure.
Lastly, it is important to remember that gold loans come with certain risks. For instance, if the price of gold falls, you may end up having to repay more than the principal amount. Therefore, it is important to understand the risks involved before availing a loan.
Company Profile
Muthoot Finance is an Indian financial services company headquartered in Kerala. The company is part of the Muthoot Group, which was founded in 1887 by Muthoot Ninan Mathai Muthoot. The company offers a range of financial services including loans, deposits, money transfer, foreign exchange, and insurance.
Muthoot Finance is one of the largest gold loan providers in India with over 3,500 branches across the country. The company offers loans against gold jewellery, gold coins, and gold bars. The loan amount is based on the value of the gold pledged and the customer’s repayment capacity. The loan tenure can range from 1 to 36 months.
Muthoot Finance also offers foreign exchange services. The company has a network of over 200 money changers across India. Customers can avail of services such as money transfer, foreign currency exchange, and traveler’s cheques.
The company has a wide network of branches and ATMs across India. Customers can also avail of the company’s 24-hour customer care service.
Loan Process
The loan process at Muthoot Finance is quite simple and easy to understand. After you have submitted the required documents, our team of experts will evaluate your application and disburse the loan amount within 24 hours. We also offer pre-approved loans, which means that you can get the loan amount without having to go through the hassle of document submission and verification.
Interest Rates
Muthoot Finance, one of the largest gold loan NBFCs in India, has increased its interest rates by 1% for both new and existing customers. The new interest rate will be 16% p.a. for a tenure of 6 months and 18% p.a. for a tenure of 12 months. This is the second time in two months that Muthoot Finance has increased its interest rates.
While the increase in interest rates is not good news for existing customers, it is still lower than the rates charged by other NBFCs. For new customers, Muthoot Finance is still a good option as it offers lower interest rates and a flexible tenure.
Loan Repayment
Loan repayment is the process of returning money borrowed from a lender, typically through periodic payments. Loan repayment can be made through a variety of methods, including cash, check, money order, or electronic funds transfer. Loan repayment typically begins after the borrower has received the full loan amount and can continue for a number of years, depending on the terms of the loan.
Loan repayment can be a challenge for borrowers, especially if they are struggling to make ends meet. If you are having difficulty making your loan payments, it is important to contact your lender as soon as possible to discuss your options. Many lenders are willing to work with borrowers to create a repayment plan that fits their budget.
If you are unable to repay your loan, you may be able to negotiate a settlement with your lender. A settlement is an agreement between you and your lender to pay off your debt for a reduced amount. Settlements are typically only an option if you are unable to repay your loan in full and are facing foreclosure or wage garnishment.
Defaulting on a Loan
When you take out a loan, you are agreeing to repay the full amount of the loan plus interest and fees. If you default on the loan, you are not only damaging your own credit but also the lender’s. The lender may report the default to the credit bureaus, which will damage your credit score. The lender may also sue you for the balance of the loan, and if they win, they can garnish your wages or put a lien on your property. If you are having trouble making your loan payments, talk to your lender immediately to see if they can work with you to make alternative arrangements.
Consequences of Defaulting
Muthoot Finance is one of the leading NBFCs in India that offers loan against gold. The company offers both secured and unsecured loans and the interest rate on the loan starts from 12% per annum. A customer can avail loan up to Rs. 1 crore and the tenure of the loan is up to 36 months.
However, if a customer defaults on the loan, there are serious consequences. The customer will be charged a late payment fee of 2% of the outstanding amount. In addition, the interest rate on the loan will increase by 2% per annum. The customer will also be blacklisted by the company and will not be eligible for any future loans.
Alternatives to Muthoot Finance
There are many alternatives to Muthoot Finance, depending on your needs. If you are looking for a personal loan, you can consider banks like HDFC Bank, ICICI Bank, and Axis Bank. If you are looking for a home loan, you can consider banks like SBI, HDFC, and Axis Bank. If you are looking for a business loan, you can consider banks like SBI, ICICI, and Axis Bank. There are many other NBFCs (Non-Banking Financial Companies) which offer loans at competitive interest rates. You can compare the interest rates and other terms and conditions before applying for a loan.
High Interest Rate
Muthoot charges 14% interest to 25% interest rates varying from gold loans, housing loans and other EMIs. Union Bank offers 1 lakh rs gold loan for only 4% of interest where in Muthoot it goes to 25% interest. Here you can see the issue.
An article from bankbazzar also states the same interest rate for Muthoot Premier Loan and the minimum loan amount is 1 lakh. Here is another example of gold loan rate of Muthoot. This interest varies depending on the loan tenure and loan amount. However it will always be on the higher side.
Here you can start laughing now.
Muthoot Gold Hidden Rates and Fees
Not just interest rate, there are tons of hidden charges and fees. If your check bounces at the time of EMI day, you will be charged. If you miss one EMI, you will be charged 500rs or more. If you are unable to pay EMI for 2 months or more, more and more penal interest and fine will be added on that. They will say there are no processing fees, however it is also charged.
1. Security Charges
2. Processing charges
3. Service Charges
4. Documentation Charges
5. Notice Charges
6. Charges for lost tokens
7. SMS Charges
8. Auction expenses
9. Cheque re-issue charges
10. Dormancy charges
11. Part release charges
12. Transaction charges (under specified schemes)
Is Muthoot Finance is good for gold loan?
Not at all. Muthoot finance is the worse company for taking gold loan. You will get the worse interest rate and you will keep paying tons of hidden charges. You will be lucky to get that gold back.
Personal Story of Car EMI on Muthoot
My brother took a car loan from Muthoot finance. He was paying of 7050rs per month for 3 year period. A down payment of 80,000rs was paid already. Out of 50 EMIs, 33 EMIs are paid correctly. Due to some reasons, 3 EMIs came pending. These EMIs are of last year and when we visited Muthoot office to get an account statement, they didn’t mention about these check bounces.
After an year, they called us and said 3 EMIs of last year are missing and you will have to pay or we will take the car away. They called references and said we didn’t pay EMI. When I asked about this old EMIs, they are telling me that why are you talking so much, if you are decent, pay the EMIs. I told them that I will ask my brother, however they insisted upon filing a special report or something. At last I told them go fil anything, or take the car. I don’t use it anyways and its not my car as well.
What I am saying is that they know there are pending EMIs and they waited and waited for 1 whole year to pass to get that much interest and fees and suddenly out of the blue started abusing and threatening. This is why I would say it has the worse customer service ever.
Second Story: Gold Loan of Muthoot Nidhi
My friend told me this story. She gave her gold chain to her ex-boyfriend and he pawned it there. They broke up and she wanted it back. He refused to give it back and I called him. He told me the mobile number which he registered, his full name and the branch name. I called the branch and gave the details. After searching for 20 minutes, they said they are unable to find the name. They also said because its been 2 years, Muthoot might have auctioned it.
Here is loan policy of Muthoot. A gold loan has a maximum tenor of 12 months. If the money is not paid, Muthoot will issue a minimum of 14 day’s prior notice for conducting an auction. This basically mean you have one year to get it back or your gold is gone- poof!. In my friend’s case, customer support is saying a notice was issued to her ex boyfriend’s name and gold might have sold off. Here they are also not sure what happened to the gold. There is no data of such a gold loan.
Conclusion
As I said before this my Muthoot Loan Personal Experience Review. Muthoot group is basically looting customers and they do not care of employees as well. This is why they had to shut their shops as well in Kerala. I strongly urge people not to approach Muthoot for any kind of loan or EMI. If you do so, do it by your sole risk.
