With gold prices on the rise, many Indian families are revisiting old gold jewellery lying idle in lockers. With adequate research, one can unlock the value of this yellow metal via gold loans. Financial institutions provide funds against the collateral of gold jewellery and coins at attractive terms. If managed well, a gold loan can meet several financial goals without straining your finances.
However, an existing gold loan may seem restrictive due to high interest rates or an inadequate loan amount. You can now transfer the outstanding principal to another loan provider at better terms through the gold loan balance transfer facility. This process is also called gold loan refinancing or takeover. Read on to understand the top benefits of gold loan balance transfer.
1. Attractive Interest Rates
One of the primary benefits of gold loan balance transfer is attractive interest rates. This is the prime motivator for most borrowers seeking a gold loan balance transfer. When financial institutions compete for low-risk customers, you get access to lower interest rates. Depending upon your creditworthiness and loan provider policies, the interest rate difference could be 2-5%. You save substantially on interest costs, thereby reducing your repayment burden.
2. Higher Loan Amount
With the appreciation in gold prices over the years, your jewellery would now be valued higher than before. Opting for a gold loan takeover allows you to unlock this incremental value and get a higher loan amount against the same gold. So, you can meet an urgent, large expense without needing to pledge additional gold. Leading loan providers offer top-up loan facilities too.
3. Flexible Tenure
Among the leading gold loan refinancing benefits is flexible tenure. Most financial institutions provide gold loans for only up to 12 months or higher. If you had borrowed for a short duration earlier but now need a longer repayment period, you can transfer your balance to a loan provider offering more flexible tenure options. A longer tenure translates into lower equated monthly instalments (EMIs).
4. Prepayment and Part Payment
Leading gold loan banks and non-banking financial companies (NBFCs) allow part payments and prepayments with minimal processing fees or penalty charges. If you receive funds before tenure completion, you can repay a portion of the principal or foreclose your loan. Such flexible features provide peace of mind.
5. Easier Accessibility
The gold loan balance transfer process has now been digitised. You need not physically transport gold to the new loan provider. The existing loan provider can directly transfer funds to the new financial institution once you submit the Know Your Customer (KYC) documents. This saves time and effort while enabling faster processing.
6. Round-the-Clock Availability
With the balance transfer process going online, you can compare interest rates and apply for a takeover 24/7 at your convenience. The ability to switch financial institutions quickly within a few clicks provides gold loan borrowers more power than before.
How Does the Transfer Process Work?
The gold loan balance transfer process follows a few simple steps:
- Step 1: Research new financial institutions and compare interest rates on offer. Check gold valuation policies too.
- Step 2: Select your new loan provider and complete the online application form for the transfer. Upload KYC documents if needed.
- Step 3: The new loan provider will contact your existing loan provider directly and request the outstanding gold loan statement.
- Step 4: Once the old loan provider confirms the amount payable, the new provider disburses the principal outstanding to them.
- Step 5: Your gold loan has been transferred to the new loan provider, but the jewellery may still remain with the original loan provider until you repay the refinanced loan.
- Step 6: You start repaying according to the fresh terms agreed upon. Enjoy the gold loan transfer advantages with lower EMIs, longer tenure, etc.
Before applying for a gold loan balance transfer, always read the terms carefully and clarify any doubts. Be aware of any hidden charges. Computing total repayment dues on both old and new loans is also advisable. This will demonstrate the real savings made. Lastly, maintain discipline in future repayments to avoid loan defaults or auctions.
Summing Up
Evaluating a gold loan takeover opportunity keeps your financing options flexible. Your jewellery can serve as valuable collateral to secure funds, without obligating you to inflexible repayment terms indefinitely. As external conditions change, so should lending relationships to best serve borrowers' interests.
By permitting fair competition and free movement of customers, balance transfers foster an efficient gold loan market. For gold owners with financial needs, there is no better time to unlock the value of their hidden treasure through Shriram Finance. With minimal documentation, digital processing, and secure storage insured against theft, Shriram Finance empowers borrowers to access essential liquidity while maintaining financial stability and peace of mind.
