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I have taken a gold loan from Muthoot. After one year, they offered me a personal loan. Due to certain circumstances, I was unable to repay the personal loan. They have now locked or deactivated my gold loan account against the personal loan. Can they legally do this? A personal loan cannot be given against a gold loan.
They cannot legally block your gold loan for non-payment of a personal loan, since both are separate contracts. A gold loan is secured against your pledged gold, while a personal loan is unsecured. You can write a formal complaint to Muthoot’s branch manager, escalate to the RBI Ombudsman, or send a legal notice asking for release of your gold after paying only gold loan dues. For further legal assistance contact us on our helpline number.