What Is Gold Loan Balance Transfer?

People apply for gold loan without considering multiple factors with various lenders. Want to know about gold loan balance transfer and how can gold loan transfer can be beneficial for you. Read Now.

28 Nov,2022 10:59 IST 63
What Is Gold Loan Balance Transfer?
People bequeath gold ornaments and items from generation to generation in India. Thus, a gold loan is the most feasible borrowing method for most citizens.

Many people apply for gold loans without researching other lenders. Consequently, they choose gold loan companies that don't offer them the best deal. Gold loan transfers can save EMI costs and increase the payout.

What Is A Gold Loan Balance Transfer?

Moving a gold loan balance from one lender to another is known as a gold loan balance transfer.

There are several reasons to transfer a gold loan.
• Being unable to pay high-interest rates
• Loans that are lower than their gold value
• No flexibility in repayment options
• A lack of adequate security for their gold

What Are The Benefits Of A Gold Loan Balance Transfer?

There are several advantages of a gold loan balance transfer, including:

1. Reduced Interest Rate

Many lenders charge higher gold loan interest rates than their competitors. Borrowers can reduce their monthly payments by transferring their loans to another lender with a lower interest rate.

2. A Higher Rate Per Gram

Financial institutions usually offer a minimum 75-90% loan amount. If your gold value is low, consider shifting your loan to a higher loan-to-value ratio (LTV) provider.

3. Better Terms

By transferring a gold loan, you can get better loan terms and no processing fees, including flexible repayment terms. The flexibility offered by this option allows you to make repayments in a time frame that best suits your financial situation.

4. Gold Security

Gold is a valuable investment. Therefore, it needs to be insured and stored safely. Transferring your gold loan to the right lender can provide this kind of security for your gold.

How Does A Gold Loan Transfer Work?

To successfully transfer the balance of your gold loan, follow these steps.

Step 1: Start the gold loan transfer process by providing the new lender with your existing pledge card.

Step 2: You will receive a savings report after sorting out all the details of the transfer process. You will have to analyse and approve the savings report.

Step 3: Complete your KYC after confirmation to finalise the gold loan personal loan transfer.

Step 4: To begin the transfer of gold to the new lender, you will receive a detailed description of the Gold Loan EMI you must pay.

Step 5: Your gold loan will be transferred successfully to the new lender when you pay the interest.

Frequently Asked Questions

Q1. Is there a cost associated with transferring a gold loan?
Ans. Yes, you will have to pay foreclosure charges to your previous lender and processing charges and administration fees to your new lender when you transfer a gold loan.

Q2. What are the effects of gold loans on credit scores?
Ans. The financial institution will regularly report your gold loan and EMI payments to CIBIL. You must make timely repayments to help improve your credit score.

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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