What Is A Gold Loan Balance Transfer?
In India, gold loans are very popular due to their low-interest rates and ease of availability. Moreover, gold loans do not come with any restrictions on their use. Thus, you can use them in various ways according to your needs.
Gold loans are common, but many do not research other lenders before applying for gold loans. They select gold loan companies that need to offer them the best deal. In such a scenario, transferring gold loans can save EMI (equated monthly installment) costs and increase payouts. Let’s learn more about gold loan balance transfer in this article.
What Is A Gold Loan Balance Transfer?
The term "gold loan balance transfer" refers to transferring a gold loan balance from one lender to another. You may want to transfer your gold loan for several reasons.
• Receiving lower loan amounts than your gold is worth
• High-interest rates are too burdensome to bear
• Payment options that are inflexible and cannot be adjusted
• You need help to secure your gold adequately.
Benefits Of A Gold Loan Balance Transfer
The following are some of the benefits of transferring a gold loan balance:1. Lower Interest Rate
Some lenders charge higher interest rates for gold loans than their competitors. When a borrower transfers their loan to another lender who offers lower interest rates, they can reduce the number of their monthly payments.2. A Higher Rate For Their Gold
In general, financial institutions offer loans of 75-90% of the gold's value. Changing your loan to a provider with a higher loan-to-value ratio (LTV) might be a good move if your loan value is low.3. Better Terms
The benefits of transferring a gold loan can also include better interest rates and no processing fees, as well as flexible repayment terms. This option offers the flexibility to make repayments when it is convenient for you.4. Gold Security
Your gold items are valuable. It is, therefore, crucial to store them safely. You can provide your gold with this type of security by transferring your gold loan to the right lender.How Does A Gold Loan Transfer Work?
Follow these steps to transfer the gold loan balance successfully.Step 1: Submit your existing pledge card to the new lender to begin the transfer process.
Step 2: Once you have sorted out all the details of the transfer process, you will receive a savings report. After receiving the report, you will have to analyze and approve it.
Step 3: Once you have received confirmation, complete your KYC to finalise the gold loan personal loan transfer.
Step 4: You will receive a detailed explanation of what you will need to pay in EMIs from the new lender.
Step 5: When you pay the interest on your gold loan, your loan will be successfully transferred to the new lender.
Frequently Asked Questions
Q1. Does transferring a gold loan cost anything?
Ans. The previous lender will charge foreclosure charges, and the new lender will charge processing and administration fees when you transfer a gold loan.
Q2. How do gold loans affect credit scores?
Ans. The financial institution will regularly report your EMI (equated monthly installment) and gold loan payments to CIBIL (Credit Information Bureau (India) Limited). Making timely repayments will help you improve your credit score.
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