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| May 31, 2022

How To Transfer A Gold Loan From Your Current Bank To Another Bank?

Everyone requires financial assistance at some point or the other in their lives, and it is always ideal to research for financing options. However, there are other borrowing options available, and you may be having trouble deciding which one to use. As a result, gold loans are among the most popular loans in India. This is because ornaments and jewellery, which are frequently passed down from generation to generation in India, provide rapid liquidity. As a result, they are commonly accepted as collateral for gold loans per gram.

Table of Content

How Exactly Does A Gold Loan Work?

A gold loan, also known as a loan against gold, is a secured loan offered by Muthoot Finance at attractive interest rates in return for gold embellishments such as gold jewellery. It is the most convenient approach to fulfilling your financial needs and a feasible alternative to regular banking channels for getting loans.

What is a Gold Loan Transfer?

A gold loan transfer from one bank to another is essentially a gold loan balance transfer. Customers generally do this when they get better loan terms and more attractive interest rates. This service, however, is not available from every lender.

The ease of securing a gold loan is governed by a variety of factors, including the interest rate, loan-to-value ratio (LTV), and others. In many cases, a gold loan provider may not provide you with the greatest deal for your gold, pushing you to refinance your gold loan. If this occurs, you may want to consider a gold loan transfer. Muthoot Finance can assist you with gold loan transfers from your current bank in the most seamless way.

Eligibility for Transferring Gold Loan

The eligibility criteria for moving gold loans from one bank to another vary depending on the financial institution, but the following are the most common: -

  • You can apply for this plan if you are between the ages of 18 and 75.
  • You must have made 6–12 Equated Monthly Installments (EMIs), or 1–5% of your gold loan's outstanding principal.
  • The gold pledged should be in the 18K–22K range.

Step-by-Step Process to Transfer Gold Loan

  • Research: Search for loan providers offering a better gold loan interest rate or more convenient borrowing terms.
  • Assess: Evaluate how much the gold loan takeover will cost you, including the processing fee and other charges that you may be required to pay.
  • Eligibility: Check if you meet the loan provider’s eligibility requirements.
  • Close Your Existing Loan: Initiate the gold loan transfer by applying for foreclosure or closure of your gold loan account with the current loan provider.
  • Documentation: Submit the required documents to the new loan provider. The documents should include identification, address proof, and the details of your existing loan, including the loan statement and repayment history.
  • Evaluation: The new loan provider will re-evaluate and re-appraise the pledged gold.
  • Loan Agreement: After verification and re-evaluation, you can sign a new loan agreement with the new provider.
  • Funds Transfer: Once the gold loan balance transfer is completed, the lender will either repay your old loan provider directly or transfer the required funds to your account, which you can use to repay the old loan.

Documents Required for Gold Loan

In order to acquire the loan against gold, the following documents for a gold loan are required: -

  • Only the most basic KYC documents, such as address and ID, are required.
  • Banks do not require income proof or CIBIL score verification to approve a gold loan.
  • Identity Verification
  • Aadhaar card, voter ID card, passport, driver's license, or other government-issued photo ID will be accepted.
  • Aadhaar card, passport, utility bill (within 3 months) or other government-approved address proof.

Benefits of Gold Loan Transfer

  • Security of Gold >As gold has significant financial and emotional worth, you must ensure that your objective is insured and held in a secure bank locker. A gold loan transfer with the correct lender will provide this protection for your gold. Muthoot Finance, for instance, provides a safe medium of storage with specialized safe rooms, round-the-clock CCTV surveillance, and tamper-proof packaging to ensure complete security of the gold you have pledged.
  • Better Interest Rate Interest rates on gold loans vary from one bank to the other. When you choose a balance transfer on your gold loan, you do it because the new lender has better interest rates. The weight of your EMI is lessened as a result, and you will be able to pay off your loan sooner.
  • Higher per Gram Rate If a new lender provides a loan with a better LTV ratio than your previous lender, you can obtain a larger loan.

Conclusion

The procedure for gold loan transfer from one bank to another entails first clearing your existing gold loan with your present bank and then pledging your gold with one of the partner banks. At Muthoot Finance, our gold loan experts will guide you at every step of the way, including the reappraisal and revaluation of your gold. This not only saves time and minimises problems, but it also makes the procedure of transferring a gold loan to Muthoot Finance simple and effortless. Visit your nearest Muthoot Finance Branch to know more.

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FAQs

Can I transfer my gold loan from one bank to another?

Yes, Muthoot Finance allows you to transfer (balance transfer) your gold loan from another lender. This allows you to switch to Muthoot’s facility with usually better rates of interest and repayment terms. The procedure is to close the outstanding balance with the current lender and repledge your gold with Muthoot and continue making repayments.

Are there any charges involved in transferring a gold loan?

Yes, there might be a charge for transferring a gold loan to Muthoot Finance. And those may include processing fees and fees from your own lender (such as foreclosure fees). Muthoot charges its own processing fee, which varies based on the loan amount. It’s essential to compare total cost savings after accounting for these charges.

What documents are required to transfer a gold loan?

For a gold loan transfer to Muthoot Finance, you will be required to show identity proof (Aadhaar, PAN), address proof, your current gold loan pledge card and possibly the KYC documents as well. Because your gold will get re-evaluated, you may also need proof of ownership and passport-sized photos. The documents guarantee a smooth and lawful transfer.

Will the new lender re-evaluate my gold?

Yes, when you are shifting your gold loan to Muthoot Finance, the firm will reassess your collateral. This is ascertained by checking the purity (carats) and weight of gold, and the market rate per gram of gold to arrive at the loan-to-value (LTV) ratio. Reevaluation is necessary to avoid the unjust application of the appropriate sum under the new contract.

How much time does it take to transfer a gold loan?

Muthoot Finance processes gold loan transfers quickly normally within 24 to 48 hours after document submission and gold revaluation. However, the overall time may vary based on the clearance from your current lender and local branch processing. Speed and ease are the primary advantages that you will enjoy if you opt for Muthoot Finance to transfer your loan.

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