At some stage of life, everyone requires financial assistance for certain reasons and this is when people opt for loans rather than exhausting their savings. While there are several borrowing options available, gold loans are among the most common and popular ones in India. With Indians believing a lot in gold investment, this comes to help during such hard times as they can use it as collateral for loans from banks or other financial institutions. However, though it has become convenient these days to avail gold loans, people often find themselves in a fix when repaying the same.
Due to higher interest rates or inability to pay regular EMIs, the loan incurs penalties, making it more difficult to repay.
Those facing a similar kind of issue can opt for the option of a gold loan balance transfer. This is usually done when borrowers get a new loan on favourable terms and attractive interest rates with other lenders. While it is clearly possible to transfer one’s gold loan balance, let’s know about it and how it helps in a lot of savings among other benefits.
What is a gold loan balance transfer?
A gold loan balance transfer is basically a process through which borrowers can move their gold loan balance from the current lender to another one for lower interest rates and better repayment options as well as favourable terms and conditions.
Benefits of gold loan balance transfer
Better interest rates: By changing the lender, borrowers can get a lower interest rate for the same loan amount. Thus, this option will not only reduce the amount of monthly EMIs but will also reduce the overall expense of the loan.
Flexible repayment: When transferring gold loan balance, borrowers should check the repayment options the lenders provide. Some lenders offer more flexible options to manage the repayment schedule which helps to pay the loan amount for both EMI as well as the principal amount.
Free insurance: Some lenders also offer free insurance coverage for your gold. This will provide a more secure environment for your gold with the lender, till the loan is completely repaid. Also, the borrower will be eligible to receive compensation in case of theft or damage.
Better LTV: Some lenders often offer a better loan-to-value (LTV) ratio than the existing loan. This helps to borrow an additional amount after the balance transfer.
Thus, with all these things in mind, one can definitely cut down on their interests and save a lot of money by transferring their gold loan balance.