As the Indian economy battles a downturn during a global pandemic, with job losses and slowed businesses, many individuals are finding it hard to meet their day-to-day needs. In such situations, a loan may help you meet your financial requirements. If you already have an existing loan, then you can simply apply for renewal instead of a new loan. Gold loan renewal is an easy process that can help you renew your contract with a gold lender, such as Rupeek, for the same or better terms.
What is a Gold Loan Renewal?
Say you have an existing gold loan with a lender. Once you have repaid your loan amount in full along with the interest, you can take out another gold loan with the same lender, pledging the same gold assets (or new ones, depending on your need).
Renewing a gold loan is different from a gold loan extension. In an extension, you approach the lender to increase the gold loan repayment time on your existing loan. For instance, if you have taken a gold loan for 12 months but are unable to repay the amount in full at the end of the term, your lender may allow you to extend the gold loan repayment period by a few more months. In contrast, when you renew an existing loan contract, you get a fresh loan amount at present or better interest rates, depending on your repayment history. Gold loan renewal is a great option for you to utilize the existing relationship with your lender and get financial support for your needs.
Benefits of Renewing a Gold Loan
There are many benefits to renewing a gold loan as opposed to applying for a new one:
Renewing a gold loan comes with the advantage of familiarity. You are already aware of the different terms and conditions of the lender. The lender is also aware of your financial situation, repayment capacity, and already has access to all your documents required for the gold loan. This means that your loan will be sanctioned faster since all the due diligence has already been done.
2. Leverage an Existing Relationship
An existing relationship with the lender gives you many advantages while renewing a gold loan. You will now have more negotiation power when compared to your first gold loan application with a new lender. You can leverage your relationship to get lower interest rates on your gold loan renewal, better duration, and other benefits.
3. Pre-evaluated Assets
Since the lender already has your assets, the evaluation process of your gold will be quicker. Although you can pledge new gold jewelry or assets, repledging the same ones will save time and effort.
4. Instant Sanction
If you choose to repledge your gold assets, the entire renewal process can be completed within the same day. A gold loan renewal online can be completed within minutes and the loan amount will be sanctioned almost instantly because the document verification, asset verification, and borrower verification have already been done.
Things to Keep in Mind When Renewing a Gold Loan
1. A loan renewal will carry many of the fees of a new loan, including processing fees, stamp duty, and other taxes. Read the documents carefully to know the charges.
2. The value of your assets may have changed since the initial loan, depending on the market conditions. If you are repledging your assets, understand the valuation of your gold to get the most out of it.
3. You do not have to renew the loan for the same terms. Your lender may offer you better loan terms, depending on your gold loan repayment history.
4. While most lenders will offer you an option to renew a gold loan, its sanction is up to the discretion of the lender. This means that a lender may reject your renewal application.
To improve your chances of a gold loan renewal, here are certain things you can do:
· Pay your dues in full before applying for a renewal.
· To establish credibility, ensure you don’t miss any EMI payments.
· Only apply for an amount you need, to keep your credit utilization ratio low.
· If your existing assets are insufficient to meet your gold loan scheme requirements, pledge new assets.
Apply for a Gold Loan Renewal Online with Rupeek
Rupeek aims to make its gold loan process as smooth and straightforward for its clients as possible. You can apply for a gold loan renewal online through our Rupeek app or speak to an executive who will guide you through the process to get the loan amount sanctioned within 24 hours! Contact our customer support for further guidance.