Gold Loan Balance Transfer - Complete Guide

Check Gold Loan Balance Transfer details at IIFL Finance. Read to know the complete details on gold loan balance transfer process to help you make an informed decision!

1 Feb,2024 12:03 IST 1319
Can A Balance Transfer Reduce Your Gold Loan EMI?

India is known for its tradition of passing down gold ornaments and jewellery from one generation to the next. As a result, using gold as collateral to obtain funds is the most feasible borrowing mode for most citizens in the country.

However, people often apply for gold loans without doing their due diligence first. As a result, they end up with a gold loan company that does not offer them the best deal. If you have been in a similar situation, a gold loan balance transfer can save your EMI costs and get you a higher payout for your gold.

What Is A Gold Loan Transfer?

Gold loan is a convenient method to get easy and fast funds by keeping gold jewellery mortgaged. As gold is one of the preferred mediums for savings in India, gold loans have grown in the country in the past few decades and now may lenders offer gold loans. This has also given a choice to borrowers to transfer their gold loans to different lenders in case they want to.

A borrower may opt for gold loan transfer for various reason, including chance of lower interest rate or longer borrowing period. Some lender may also offer higher loan if prices of gold has risen. However, not all lenders offer the option of gold loan transfer and one has to weigh all the pros and cons before submitting to the process.

Gold loan transfer is the process of moving your existing gold loan from one lender to another, in order to get better terms and benefits. Gold loan is a popular way of borrowing money in India, as many people have gold jewellery that they can use as collateral. However, not all lenders offer the same interest rates, loan-to-value ratios, repayment options, and security features for your gold. Therefore, you may want to switch your gold loan to a different lender who can offer you a more suitable deal.

How to do a Gold Loan Transfer at IIFL Finance

IIFL Finance is one of the best lenders for gold loan transfer, as it offers low-interest rates, high loan-to-value ratios, flexible repayment options, no processing fees, and insurance cover for your gold. If you want to transfer your gold loan to IIFL Finance, you need to follow these simple steps:

  • Provide your existing pledge card to IIFL Finance to start the gold loan transfer process.
  • Receive a savings report from IIFL Finance that shows you how much you can save by transferring your gold loan to them. Review and approve the report.
  • Complete the KYC process with IIFL Finance to finalize the gold loan transfer.
  • Pay the outstanding interest to your previous lender to release your gold to IIFL Finance.
  • Enjoy the benefits of gold loan transfer with IIFL Finance.

What Are The Other Advantages Of A Gold Loan Transfer?

The advantages include:

1. Reduction In Interest:

Many lenders charge higher Gold Loan EMI than their competitors. Borrowers can choose a lender with a lowest gold loan interest rate by transferring their loans, making the process of paying a loan much easier.

2. An Increased Rate Per Gram:

Financial institutions offer loans anywhere upto 75% of the gold loan value. If you’re getting a lower value for your gold, moving the loan to a provider offering a higher loan-to-value (LTV) ratio is a great option.

3. Better Terms:

Gold loan transfer offers a possibility to get better loan features, including flexible repayment terms and no processing fees.

4. Improved Security And Insurance Facilities:

Some borrowers may be dissatisfied with the security for their gold provided by their current lender. Therefore, a gold loan transfer to a lender that offers better protection, such as insurance policies, might be the better option for them.

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What Is The Gold Loan Transfer Process?

Follow these steps to successfully transfer your gold loan balance:
Step 1:
Provide the new lender with your existing pledge card to begin the gold loan transfer process.
Step 2:
After the details of the entire transfer process are sorted out, you will receive an analysis of the savings report that you must evaluate and then approve.
Step 3:
Following confirmation, complete the KYC process to finalize the gold loan personal loan transfer.
Step 4:
You'll receive a detailed description of how much Gold Loan EMI you have to pay to the original lender to start the transfer of gold to the new lender.
Step 5:
Upon paying this interest, your gold loan will successfully get transferred to the new lender.

What Are The Gold Loan Transfer Documents Required?

The following gold loan documents are often requested by lenders during gold loan transfers:
• Filled gold loan application form.
• Identification Proof. It could be an Aadhar card, PAN card, passport, driving license, or voter ID.
• Proof of address, which may be in the form of utility bill, gas bill, water bill (latest), passport, and more.
• A signature proof.
• Passport-size photographs.

Can we transfer gold loan from one account to another?

Yes, you can transfer your gold loan from one account to another, as long as both accounts belong to the same lender. This may be useful if you want to consolidate your multiple gold loans into one account, or if you want to change the mode of repayment or the interest rate of your gold loan. However, you need to check with your lender if they allow this option and what are the terms and conditions for it.

Gold Loan Balance Transfer Charges

A gold loan balance transfer involves some charges, which vary based on the existing lender and the new lender. These charges include:

1. Pre-Closure Charges:

Often called foreclosure charges, pre-closure charges are the fees you pay to your existing lenders to cover the interest loss when you close your loan too early. Every bank has different foreclosure criteria, and they range from nil to up to 1%.

2. Processing Fees:

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

3. Inspection Charges:

A fee is charged by the financial institution when they evaluate pledged collateral.

4. Administration Charges:

When you apply for a loan, a lender charges you a non-refundable fee, which applies to the basis of the loan amount.

Why should you choose gold loan balance transfer?

You should choose a gold loan balance transfer if you are unhappy with your current gold loan and want to get a better deal from a different lender. Some of the reasons why you may want to transfer your gold loan are:

  • You can get a lower interest rate, which can reduce your EMI costs and save you money in the long run.
  • You can get a higher loan-to-value ratio, which can increase the amount of money you can borrow against your gold.
  • You can get better loan features, such as flexible repayment options, no processing fees, and insurance cover for your gold.
  • You can get better security for your gold, as some lenders may offer more advanced storage and protection facilities for your gold.

Save More With Gold Transfer With IIFL Finance

IIFL Finance offers the best benefits when you want to maximise the benefits of gold loan. The interest rate is as low as 0.83% p.m. and there are no processing fees involved. Transferring your existing loan balance to IIFL can easily increase the value of your existing loan by 30%. Additionally, if you're looking for a way to get an extension of your loan in under 30 minutes, the IIFL Gold loan is your best choice.

Conclusion

Gold loan transfer is a smart way to save money and get better benefits from your gold loan. By transferring your gold loan to IIFL Finance, you can enjoy low interest rates, high loan-to-value ratios, flexible repayment options, no processing fees, and insurance cover for your gold. You can also transfer your gold loan from one account to another within IIFL Finance, if you want to change your loan terms. To transfer your gold loan to IIFL Finance, you just need to follow a few simple steps and provide some basic documents. So, what are you waiting for? Apply for gold loan transfer today and get the best deal for your gold!

Frequently Asked Questions

Q1. Does transferring a gold loan cost anything?
Ans. Yes. Transferring your gold loan will involve some fees like foreclosure charges to your previous bank, and processing and administration charges to your new lender. These fees can vary from lender to lender.

Q2. What are the effects of gold loans on credit scores?
Ans. Gold loan EMI payments are reported to CIBIL regularly to update your credit score. As with any loan, the gold loan has an interest rate and term. Make sure that you repay the loan on time.

Q3. Is a balance transfer of gold loan a good idea?
Ans. A borrower should check the cost of gold loan transfer, such as penalty etc, and weigh it against the savings, including those from lower interest rate. If the borrower ends up saving money or the new lender offer better gold loan repayment term, then only fold loan transfer makes sense.

Q4. What happens if you don’t pay back your gold loan?
Ans. The lender will have the option to sell the pledged jewellery in case the gold loan is not repaid in full. The lender, whoever, has to notify the borrower two weeks before any such auction.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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