A gold loan balance transfer is a good idea to reduce the interest rate on loan, significantly bringing down your EMI. If a borrower is paying high interest on a gold loan with the existing lending institution, they can shift their loan to another gold loan provider and save on interest.
Gold loans in India are offered by most lending institutions. Also, they offer balance transfers on loans at a low-interest rate. If you are not happy with the service of your existing lender, transfer your gold loan to a renowned NBFC.
Let us know more about Gold Loan Transfer.
What is a Gold Loan Balance Transfer?
Shifting a gold loan from one lending institution to another is the gold loan balance transfer. A borrower should select a new lender carefully to make the transfer decision worthy and maximise the benefits of low-interest rates and reduced EMIs. The lender wants a borrower to pay a few EMIs before transferring the loan. If the borrower requires more funds, lenders may grant a top-up facility on the gold loan.
What are the Advantages of Gold Loan Balance Transfer?
– Get Higher Per Gram Loan.
The new lender offers a higher LTV ratio than the existing lender. It helps borrowers to get a high loan amount. Borrowers can get up to 70% of the pledged gold value.
– Save on costs.
The borrowers can get a lower interest rate with the new lending institution. The lower interest rate means reduced EMI and more savings. Also, avail of better features on loans like zero processing fees, easy repayment terms, flexible tenure, etc.
– Increased safety of pledged gold
A borrower can enjoy increased security for the pledged gold. Many reputed lenders offer insurance with gold loans against loss due to theft or damages.
Gold Loan Transfer Charges
A few charges concerning transferring a gold loan vary by lenders are as follows.
- Foreclosure/pre-closure fee: The old lender charges this fee for gold loan prepayment for closing the loan account before loan tenure. This fee may be nil to 1%.
- Processing fees: New lenders may charge a processing fee to process the loan. It can go up to 1% of the loan amount.
- Administration fee: It is also a fee to process the loan.
- Inspection fee – The new lender may inspect your pledged gold against a fee.
Gold Loan Balance Transfer Process
- First, the borrower needs to explore the most beneficial gold loan provider. Check the current interest rate with various lending institutions.
- Check other fees and charges associated with the gold loan. Estimate how much money it will save on loan costs.
- Finalise the new lender to transfer the gold loan and check your eligibility as per its set criteria.
- Foreclose the gold loan account with the current lender.
- Withdraw all submitted documents for the loan from the existing lender.
- Apply for a gold loan with the new chosen lending institutions. Fill in the online application form.
- Submit the required documents and complete the KYC process.
- Get disbursal of the new gold loan through a cheque in favour of the old lender and deposit it.
Eligibility Criteria for Gold Loan Balance Transfer
Here are the common eligibility criteria with most lending institutions:
- The borrower’s age should be between 18 years and 75 years.
- The borrower must have paid 6-12 EMIs of the gold loan to the existing lender.
- Pledged gold purity should be between 18K-22K.
Document Requirement for Gold Loan Balance Transfer
Generally, the lender may ask for the following documents to take over an existing gold loan with another lender:-
- Gold loan online application
- Proof of Identity – Aadhaar card/PAN card/Passport/Driving Licence/Voter ID card
- Proof of Residence – Electricity bills/Gas bill/Water bill (latest), Driving Licence/Passport
- Passport size latest photo
If you are looking for a gold loan provider for the gold loan balance transfer, you can consider Muthoot FinCorp. Muthoot FinCorp Gold Loans are affordable and flexible for different borrowers with diverse profiles. Borrowers can avail of loan amounts of up to Rs. 50 lakhs and the interest rate starts at 6.90% only.
Gold Loan Calculator
A borrower should utilise a gold loan calculator before deciding on the loan transfer.
- Quick and accurate results for loans against gold
- Know monthly EMI amount prior to a loan application with the new lender
- Choose a comfortable loan tenure to pay an EMI without the financial burden
- Manage your monthly expenses efficiently.
