Can I Transfer A Gold Loan From My Current Bank To Another Bank?

India is well-known for its custom of handing down gold ornaments and jewellery from generation to generation. Therefore, using gold as security to get loans is the most practical borrowing option for the majority of the country’s population.

However, individuals often request gold loans without first doing a thorough investigation. Therefore, they wind up with a gold loan business that does not provide them with the greatest possible bargain. If you are in a similar scenario, a gold loan transfer may save you money on EMIs while also getting you a better return for your gold.

What exactly is a gold loan?

A gold loan, also called a LAG (loan against gold), is a type of secured loan taken from a creditor in return for gold goods. Lenders will usually provide you with a loan based on a percentage of the gold’s value. You can pay it back in monthly instalments and get your gold items back. Like similar secured loans, like a home or car loan, gold loans have no restrictions on how they can be used. So, if you need to pay for a marriage, a vacation, or your kids’ education, it is a terrific option to fulfil an unexpected financial need. Furthermore, several commercial and nationalised banks, as well as NBFCs, provide gold loans at low interest rates.

What exactly is a gold loan transfer?

When you do a gold loan transfer to the other bank from one bank, it is known as a gold loan transfer. Many consumers move their gold loans because they are dissatisfied with their current lender’s customer service or because the loan amount is less than the gold’s worth.

One of the most frequent reasons consumers switch loan amounts is because their present lender charges high loan instalments. Although gold loans have a relatively short repayment time, high interest rates may result in a substantial amount to repay. This means that by simply shifting your money, you may be able to lower your gold loan instalments.

When should you think about using a gold loan transfer service?

• When you need money to get yourself out of a financial problem.
• Money is easily available for business expansion, education, and other purposes.
• You’ve already obtained a gold loan and made various instalment payments.
• You would like a loan with minimal documentation that can be handled quickly.
• You need a gold loan with a lower interest rate than you currently have.

What are the additional benefits of a gold loan transfer?

The benefits of transferring a gold loan are:

Interest rate cut

Many lenders demand higher gold loan EMIs than their rivals. Borrowers may transfer their debts to a lender with a reduced interest rate, making the process of repaying a loan much simpler.

Higher rate per gramme

Financial institutions provide loans ranging from 75–90% of the gold loan value. Moving the loan to a supplier with a greater loan-to-value (LTV) ratio is an excellent choice if you’re obtaining a lesser value for your gold.

Improved Terms

A gold loan transfer provides the opportunity to get better loan conditions, such as flexible payback periods and no processing costs.

Increased Security and Insurance Options

Some borrowers may be unsatisfied with the security supplied by their existing lender for their gold. As a result, a gold loan transfer to the other bank that provides stronger protection, such as insurance policies, may be the best alternative for them.

What exactly is the gold loan transfer procedure?

To effectively transfer your gold loan sum, follow these steps:

Step 1:

To begin the gold loan transfer procedure, provide the new lender with your current pledge card.

Step 2:

After the specifics of the whole transfer procedure have been worked out, you will get a savings analysis report, which you must examine and then approve.

Step 3:

Complete the verification process after confirmation to finalise the personal gold loan transfer.

Step 4:

You will be provided with a detailed breakdown of how much in gold loan instalments you need to repay to the previous lender to start the gold transfer to the new lender.

Step 5:

After you pay the interest, your gold loan will be successfully transferred to the new lender.

What gold loan transfer documents are required?

Lenders often seek the following papers during gold loan transfers:

• Completed gold loan application form
• Identification documentation: It might be an Aadhar card, a PAN card, a passport, a driver’s license, or a voter identification card
• Proof of address, such as a utility bill, gas bill, most recent water bill, passport, and so on
• A signature verification
• Passport-sized photos
• Balance Transfer Fees for Gold Loans

Charges for Transferring Fees

Charges for a gold loan transfer to the other bank differ depending on the current and new lenders. These fees are as follows:

1. Pre-closure fees

Pre-closure costs, also known as foreclosure charges, are payments made to your current lenders to compensate for the interest lost when you close your loan too early. Each bank has its own foreclosure threshold, which varies from 0% to 1%.

1. Processing Charges

Processing fees range from 1% to 5% of the loan amount for banks and NBFCs.

2. Inspection Fees

When a financial institution evaluates pledged collateral, it charges a fee.

3. Administrative Fees

When you apply for a loan, the lender charges you a non-refundable fee that is applied to the loan amount.

Conclusion

A gold loan transfer to the other bank from one bank could be a smart choice. The procedure is typically fast and easy, and the new loan will have a lower interest rate. Also, the borrower may make use of several real-value services as well as various repayment choices. Gold loans, in general, are useful when you want funds quickly. Not only should you comprehend such items to deal with future needs, but you should also be aware of impending new variations that are safer and efficiently cut the total interest load on the loan. To know more about such types of topics, visit Piramal Finance.