Gold Loan Transfer

Last Updated: 15 Oct 2024

The demand for gold loans has increased dramatically as domestic gold prices have reached record highs. Small business owners who are experiencing losses are resorting to gold loans as realistic financing solutions given the current situation to keep their operations functioning.

The market for gold loans in India is estimated to be worth $46 billion, with informal lenders controlling the majority of the market. Those who borrow money from these lenders frequently end up paying interest at rates between 25% and 50%, which raises the total cost of the loan by nearly half of the amount borrowed as its principal. It is just not practical to spend that much money on loan repayment given the current economic crisis.

Transferring a gold loan’s balance from one lender to another is known as a balance transfer. If you are dissatisfied with the customer service or if another bank has a higher interest rate, you can switch your gold loan account from one lender to another. However not all lenders offer this option. Examine the benefits of relocating the loan before deciding if it is advantageous to do so.

The lender typically decides how simple it is for you to get a gold loan. Many factors, such as interest rate, loan-to-value ratio (LTV), and others, influence this. In many cases, a gold loan provider may not give you the best deal for your gold, leading you to refinance your gold loan. If this occurs, you might search for a gold loan transfer. These companies can assist you in moving your current gold loan from a bank to a lender more suited to your requirements.

Benefits of Transferring your gold loan

Here are some of the benefits of transferring your gold loan:

• Your per-gram rate will rise. If a new lender offers a loan with a better LTV ratio than your previous lender, you may be able to get a larger loan.
• While NBFCs will lend up to 70% of the current gold value, the majority of public and private sector banks will only lend up to 65%.
• With a new lender, you can earn an annual interest rate as low as 9.00%.
• As you can see, a lower interest rate results in lower EMIs and consequent cost savings.
• You can obtain superior lending benefits like flexible payback options and no processing fees.
• If the repayment terms provided by the previous lender upset their financial health due to unfavourable terms, high interest rates, and other factors, borrowers may choose to use the loan balance transfer facility.
• Finally, you can improve the gold’s level of security. For instance, insurance against theft and other damages while in transportation is available with some lenders.

Most of the time, borrowers decide to choose a new lender for their existing gold loans in order to maximise their benefits from the proposition and make sure that paying back the loan won’t become a problem in the long run.

Making the most of the circumstance may require more than simply making the choice to start the loan transfer process. Finding a lender with loan terms that are better than your current lender is also essential.

Sapna aapka. Gold Loan Humara

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Factors to consider before choosing a new lender for gold transfer

It is crucial to choose the right lender if you want to maximize the value you can derive from a gold loan. The benefits listed below are available to borrowers who move their gold loans from their current lender to an NBFC:

• You can save up to 31% on the total interest paid on the loan you borrowed for a period of up to 6 months thanks to the excellent interest rates offered by this NBFC.
• According to instructions from the RBI, borrowers may obtain a 75% LTV against the whole amount of the gold pledged. Yet, it’s possible that your lender isn’t giving you the most LTV possible for your gold. In this case, you can effortlessly transfer your loan from your current lender to this NBFC and get a large loan sum secured by your gold.
• By choosing a loan balance transfer and moving your loan to this NBFC, you may take advantage of favourable terms that may lessen the financial stress of repaying your loan. For instance, you can decide to pay back the interest that was accrued each month and the principal amount after the loan’s term is up.
• The NBFC takes all necessary steps to guarantee the security of the gold pledged. For instance, following the transfer, the gold is stored at the bank and kept there until the borrower is able to take it back. Additionally, the loan is still covered by insurance during this time against things like theft and damage in transportation, among other things.

These are only a few advantages of choosing a gold loan transfer from your current lender to other institutions offering a variety of advantages.

Documents required for gold loan transfer

In the event of a transfer of a gold loan, a lender frequently requests the following records:

• Form for requesting a gold loan
• Acceptable forms of identification include Aadhar cards, PAN cards, passports, driving licences, voter identity cards, and job cards issued by NREGA.
• All of the following are valid forms of address verification: electricity bills, petrol bills, water bills (most recent), passport, driver’s licence, office address-lease/ownership/rent certificate, and job card issued by NREGA.
• Identity-verifying documents (signature proof)
• photos the size of a passport

Eligibility Criteria for gold loan transfer

The prerequisites for moving gold loans from one bank to another vary depending on the financial institution, however the following are the usual requirements: –

• If you are between the ages of 18 and 75, you may apply for this plan.
• You must have settled your gold loan with 6–12 Equated Monthly Instalments (EMIs) or 1–5% of the remaining principal.
• The 18K–22K range should be used for pledged gold.

What does gold loan balance transfer process look like?

To transfer a gold loan from one lender to another bank, follow the instructions listed below.

• Look at the currency rate right now.
• Determine how much you’ll save on interest.
• Determine the cost of processing fees and additional expenses.
• You can switch your gold loan to a different lender of your choosing.
• Assess the prerequisites for a new lender.
• Your present bank’s gold loan account should be closed.
• Get every piece of documents that the previous lender gave.
• Send your current gold loan pledge card to a new lender.
• Submit a gold loan application to a new bank.
• Fill out the application and include all required documentation.
• Finish the KYC process.
• Finish the new gold loan agreement.
• Take a check or demand draught from the new bank payable to the old bank and deposit it.

Sapna aapka. Gold Loan Humara

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