All You Need To Know About Gold Loan Balance Transfer

Nov 7, 2020

All You Need To Know About Gold Loan Balance Transfer

With gold prices touching a record high in the domestic market, demand for gold loans has risen exponentially too. Given the current predicament, small businesses owners suffering losses are turning to gold loans as viable financing options to keep their operations running.

Now, as per a report published in The Print, India’s gold loan industry is valued at around $46 Billion, the majority of which is dominated by informal lenders. Individuals, while borrowing from such lenders, often end up paying interest at rates between 25% and 50%, which increases the overall cost of the loan by almost half of its principal amount borrowed. Given the current economic crisis, spending that amount in repaying the loan is, frankly, unfeasible.

Benefits of Opting for a Loan Balance Transfer Facility

In the current situation, existing borrowers can choose to switch their loans through loan balance transfer from one lender to another and avail a low interest rate against their borrowed amount to reduce their overall repayment liability.

In this regard, the competitive rates offered by a few NBFCs can certainly offer borrowers the much-needed respite from hefty interest payments against their existing gold loans.

There are several circumstances which can urge a borrower to opt for a gold loan transfer facility. These are –

  • Exorbitant interest rates

The most common situation during which borrowers are prompted to transfer their loan balance from one lender to another is when their existing lender charges an extremely high interest rate against their loan. Even though the tenures of gold loans are significantly shorter than other secured loan options, a high rate of interest may lead individuals to incur significant charges to repay the loan.

  • A low loan to value

Loan to value or LTV denotes the percentage of the pledged gold’s total value that borrowers can avail as a loan. Typically, with leading gold loan lenders, borrowers can avail an LTV of up to 75% of their pledged gold’s total value. So, those receiving a lower LTV percentage can choose to shift their existing loans to a lender offering the loans at a high ratio.

  • Insufficient security for the asset pledged

Given the equity associated with gold, borrowers might not be satisfied with the security offered by their existing lenders for their pledged assets. It may lead them to seek out better options wherein they can avail better protection for the gold they pledge as collateral, in the form of insurance policies, and such.

  • Flexibility in repayment terms

Borrowers may opt for the loan balance transfer facility if the repayment terms offered by the existing lender upset their financial health by way of inconvenient tenure, high interest rates, and such.

Mostly, borrowers choose to opt for a new lender for their existing gold loans to ensure that they can maximise their benefits from the proposition and repaying the loan does not translate into a burden in the long run.

Now, merely undertaking the decision to initiate the loan transfer process might not be sufficient to make the most of the situation. It is also crucial to find a lender offering loan terms that are better than your existing lender. In this regard, the features and benefits of the gold loans offered by Rupeek Fintech Pvt. Ltd. can be worth noting.

Why Transfer Your Gold Loan to Rupeek?

When it comes to optimising your utility from your gold loan, there is hardly any lender that can match up the benefits offered by Rupeek. Following is a list of advantages that borrowers can avail if they switch their gold loans from their existing lender to this NBFC –

  1. Lowest interest rates offered

With the competitive interest rates offered by this NBFC, you can save up to 31% on your total interest paid on the loan borrowed for a tenure of up to 6 months. This saving can be enjoyed with an annual interest rate of 19% offered by Rupeek on its doorstep loan schemes, as compared to competitor lenders whose interest rates can go up to 24% per annum.

  1. A higher loan to value amount

As per RBI directives, borrowers can avail an LTV of 75% against the total value of the gold pledged. However, your lender might not be offering you the highest LTV that you can avail against your gold. Under such a situation, you can easily transfer your loan from your existing lender to this NBFC and avail a high loan amount against your collateralised gold.

  1. Easiest repayment terms

By opting for a loan balance transfer and switching your loan to this NBFC, you can avail favourable terms that can make it easier for you to bear the financial burden of repaying it. For instance, you can choose to repay the monthly interest incurred, and pay the principal amount after completion of the loan tenure. Or, you can defer your entire payment, principal and interest, to the end of your loan’s term, thereby alleviating the burden imposed by traditional EMIs on your finances through your loan’s tenure.

  1. Guaranteed security of the gold pledged

The NBFC undertakes all essential measures to ensure the safety of the gold pledged. For instance, once the gold is transferred, it is deposited at the vault of Rupeek’s nearest partner bank, where it remains until the borrower can repossess it. Furthermore, throughout this duration, the loan remains insured against eventualities like theft and damage during transit, etc.

These are, but a few benefits that can be availed by opting for a gold loan transfer from your existing lender to other institutions offering variegated benefits.

How to Initiate the Process of a Loan Balance Transfer?

You can easily initiate the process of transferring a gold loan from your existing lender to Rupeek by following the steps given below –

Step 1 – You need to share your existing pledge card with the NBFC. You cannot hope to proceed with the loan transfer process if you do not have a valid pledge card for your existing loan.

Step 2 – Once the details of the entire transfer process are worked out, you will be provided with detailed insight into the savings report, which has to be evaluated and then confirmed.

Step 3 – After the aforementioned details have been confirmed, you will need to undergo a hassle-free KYC registration process, which can be completed in a few minutes.

Step 4 – Following KYC registration, you will be proffered with detailed information about the interest amount that you will need to pay to the original lender, to continue with the loan transfer process.

Step 5 – The transfer process will be completed after this interest amount has been paid to the original lender.Thus, the loan balance transfer process can be easily completed by following the steps mentioned above. You can request a loan transfer through the NBFC’s website, app or by placing a call, and subsequently enjoy better terms for a gold loan today!

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