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Gold Loan Balance Transfer

Gold Loan Transfer to Other Bank

Last Updated 24th Jan 2022

Interest Rate 9.00% -15.00%
Loan Tenure 3 months - 36 months
Processing Fee Upto 1% of loan amount
Prepayment Charges Nil to upto 1%
Lowest EMI per Lakh ₹ 4,473
  • Transferring a gold loan from one lender to another lender is called Gold Loan Balance Transfer.
  • Gold loan transfer from one bank to another can lower the EMI and provide insurance on the yellow metal which is pledged.
  • Documents required for gold loan balance transfer are application form, identity proof, address proof and previous gold loan pledge card.

Video: Gold Loan Benefits, Eligibility, Documents & Process

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What is a Gold Loan Transfer?

The process to transfer a gold loan from one lender to another is called a gold loan balance transfer. You can transfer the gold loan account from one lender to another if you are not happy with the customer service or are getting a lower interest rate from another bank. However, every lender does not offer this facility. Before transferring the loan, check if this decision is worth transferring and what benefits you can have. HDFC Bank offers a gold loan at the lowest interest rate of 9.00% per annum.

What are the Benefits of Transferring Gold Loan?

The advantages of transferring a gold loan are:-

  • Get a higher per gram rate. If a new lender provides a loan at a higher LTV ratio then the current lender, you can get a higher loan amount. Most public and private sector banks offer up to 65% of the current value of gold, and NBFC offers up to 70% of the current value of gold used as collateral.
  • You can get a lower interest rate as low as 9.00% per annum with a new lender.
  • The lower interest rate means reduced EMI, which helps in saving money.
  • You can avail of better loan features like Nil processing fees, repayment terms, etc.
  • Lastly, you can get more security for the gold which you have pledged. For example, you can get insurance against theft and other damages during transit.

Eligibility Criteria for Gold Loan Balance Transfer

Every financial institution has different eligibility criteria for gold loan transfer from one bank to another, but the standard criteria is as follows:-

  • If you are aged between 18 years and 75 years, you can apply for this scheme.
  • You must have paid 6-12 Equated Monthly Installments (EMIs) of the gold loan that you own or 1-5% of the outstanding principal.
  • Pledged gold should be in a range of 18K-22K.

Documents Required for Gold Loan Transfer

The general set of documents that a lender will ask in case of a gold loan takeover are as follows:-

  • Gold loan application form
  • Identity Proof- Aadhaar card, PAN card, Passport, Driving License, Voter ID, Job card issued by NREGA
  • Address Proof- Electricity bills, Gas bills, Water bills (latest), Passport, Driving License, office address- lease/ownership/rent certificate, Job card issued by NREGA
  • KYC documents (signature proof)
  • Passport size photographs

Gold Loan Balance Transfer Process

Follow the below-given steps to transfer the gold loan from one lender to another bank:-

  • Check the current rate
  • Calculate how much money you will save on interest
  • Evaluate the cost of processing fees and various charges
  • Select a new lender where you wish to transfer the gold loan
  • Check eligibility criteria of a new lender
  • Foreclose the car loan account with the existing bank
  • Get all the submitted documents from the previous lender
  • Share your existing gold loan pledge card with a new lender
  • Apply for a loan in a new bank
  • Fill the application form and submit the required documents
  • Complete the KYC process
  • Execute a new loan agreement
  • Take disbursement from the new bank by way of cheque/ demand draft in favour of the existing bank and also deposit the same

Gold Loan Transfer Charges

The charges involved in transferring a gold loan vary for every bank, depending on the existing lender and a new lender. However, some essential charges which are incurred are:

  • Foreclosure Charges - Foreclosure charges are also known as pre-closure charges, which are paid by you to your existing lender. A lender incurs the charges to cover the lost interest due to closing the loan account before time. The foreclosure rate for every bank is different and generally starts from nil to even up to 1%.
  • Processing Fees- For loan processing, banks and NBFCs charge a processing fee that ranges between up to 1% of the loan amount.
  • Administration Charges - A non-refundable fee charged by a lender when a person applies for a loan. The administration fee ranges from ₹ 2,500-₹ 6,500.
  • Inspection Charges - The bank will levy fees when they evaluate collateral that will be pledged.

FAQs

Which bank is best for a gold loan balance transfer?

Gold loans in India are offered by most of the banks and NBFCs. Muthoot, Manappuram, Andhra Bank are considered acceptable because they offer balance transfer on loans at the lowest interest rate of 6.90%, 7.00% and 7.25%, respectively.

Can the gold loan be transferred from one bank to another?

Yes, you can transfer a gold loan from one bank to another if you get a lower interest rate with another bank or are not happy with the service of a lender. Also, you must have paid at least a few EMIs with your old lender to transfer the loan. In general, lenders prefer at least 12 EMIs to be paid before transferring the loan.

Can we get a top-up on a gold loan?

Yes, you can get top up on a gold loan if your lender offers this facility. Generally, lenders allow top-up loans if you have made all your EMI payments on time.

Are there any charges for gold loan transfer?

Yes, you will have to pay various charges for the balance transfer of the gold loan. For example, you will have to pay foreclosure charges to your old bank, and to the new lender, you will have to pay processing fees. These charges may vary from bank to bank.

Is balance transfer of gold loan a good idea?

A balance transfer of a gold loan is a good idea if you transfer your loan to a bank that offers gold loans at a lower interest rate. The reduced interest rate can significantly bring down your EMI and help you save money.


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