Gold Loan Balance Transfer
The process of transferring a gold loan balance from one lender to another is known as a Gold Loan Balance Transfer. If you are dissatisfied with the customer service, or if the bank charges you a higher interest rate, you can transfer your gold loan account to another lender. This service, however, is not offered by every lender. Consider whether it is beneficial to move the debt and what benefits you may gain before doing so.
The lender typically influences how easy it is to secure a gold loan. This is impacted by several factors, such as the flexibility in repayment schedule, interest rate, loan-to-value ratio (LTV), and others. In many cases, a gold loan provider might not provide you the greatest deal for your gold. If this occurs, you may want to consider a gold loan transfer. These companies can assist you in transferring your existing gold loan from a bank to a lender more suited to your needs.
What are the benefits of a Gold Loan Transfer?
The following are the primary advantages of transferring a gold loan:
- Lower interest rate: With a new lender, you can get a lower interest rate that will be easy on your pocket and saves money.
- Raise your per-gram rate :If a new lender offers a better Loan-to-Value (LTV) ratio, i.e., a higher loan amount than your previous lender, it is advisable to transfer the loan. However, such benefits should be explored only if you wish to borrow additional loan amounts
- Banks or NBFCs:Most public and private sector banks will offer lower loan-to-value ratio and lend up to 65% of the current gold value, while non-bank financial companies (NBFCs) would lend up to 70%
- Better terms:You can obtain better loan features, such as no processing fees and flexible repayment terms.
- Insurance facilities:You have the option of increasing the security of the gold you have promised. For example, Shriram Finance provides an insurance cover against gold being robbed and other damages.
When should you consider using a Gold Loan Transfer Service?
- When you require fast cash to get out of a financial bind.
- Money is available immediately for business expansion, education, and other objectives.
- You've already taken out a gold loan and started making EMI payments.
- You want a loan that involves less paperwork and can be processed promptly.
- You need a gold loan with a lower interest rate than the one you already have.
The Gold Loan Balance Transfer Procedure
Here is how one can transfer a gold loan from one lender to another:
- Weight the current exchange rate.
- Determine how much money you get to save on interest.
- Determine the processing fees cost and all the other expenses.
- Select a new lender to whom you prefer to transfer your gold loan.
- Examine a new lender's eligibility requirements.
- Close your present bank's gold loan account.
- Ask for all of the paperwork that the previous lender provided.
- Provide the new lender with your old gold loan pledge card.
- Make a gold loan application with a new bank.
- Fill out the application form and attach any required documentation
- Finish the KYC process.
- Fill out a new gold loan contract.
- Deposit a distribution from the new bank in the form of a check or demand draught made payable to the previous bank.
Eligibility Criteria for Gold Loan Balance Transfer
The qualifying parameters for transferring gold loans from one bank to another vary by the financial institution, but the following are the general criteria:
- You must be aged between 18 and 75 to apply for this plan.
- At least 6-12 Equated Monthly Installments (EMIs) must have been paid on your gold loan, or 1-5% of the outstanding principal.
- The committed gold should be between 18K and 22K.
1. How does a gold loan impact your credit score?
When you secure a gold loan, your EMI payment information is reported to CIBIL at regular intervals to update your credit score and credit history. To return the gold loan, pay the EMIs on time. The gold loan, like any other sort of loan, has a set interest rate and length.
2. What happens if you fail to repay your gold loan?
The gold will be auctioned off. Failure to repay the loan will result in the gold being auctioned off by the bank or financial institution because the gold was pledged as security. As a result, this is now a liquidated non-performing asset.
3. What is the most effective method for you to repay your gold loan?
Foreclosing on a gold loan is as easy as getting it approved. Borrowers must, however, choose a repayment scheme that fulfills their needs while remaining manageable. If they have a long credit cycle, salaried persons, for example, should pick EMI installments over bullet payback.
4. Can we get a gold loan refinanced?
Yes, if your lender allows it, you can get a top-up on a gold loan. Top-up loans are generally permitted if you have made all your EMI payments on schedule.
5. Is there a fee for transferring a gold loan?
Yes, there will be fees associated with the gold loan balance transfer. For example, you have to pay foreclosure charges to your previous bank, as well as processing fees to the new lender. These fees may differ from one bank to the next.
6. Which bank is the best for transferring a gold loan balance?
Most banks and non-banking financial companies (NBFCs) in India provide gold loans. Muthoot, Federal Bank, and Manappuram are regarded as respectable because they offer balance transfers on loans at the lowest interest rates of 6.90%, 6.99%, and 7.00%, respectively.