The procedure of transferring the outstanding loan amount from an existing personal loan account to a new account with another lender is known as a personal loan balance transfer. A personal loan balance transfer is mostly used to obtain better terms, such as lower interest rates and other benefits. Those who are either paying more on their personal loan EMIs or have a limited tenure time would benefit from the scheme. However, before taking advantage of this. One should carefully consider the balance transfer offers and the entire cost of doing so.
Why personal loan balance transfer?
Personal Loans Balance Transfer guarantees that borrowers are not burdened by high EMIs by allowing them to transfer their current loan to a lower-interest lender. If a borrower is displeased with the existing lender’s services, he or she can choose a personal loan balance transfer. However, before you choose one, you should consider the entire cost of transferring the loan. The savings that will be realized, and the terms.
Lower interest rates:
The most important advantage of a personal loans balance transfer is that you can refinance your loan at reduced personal loan interest rates. A lower interest rate translates to a reduced EMI and more savings, allowing you to focus on other financial goals.
Change loan tenure:
You can change the term of your personal loans by transferring the balance. A longer term equals lower EMIs. Whereas a shorter term means higher EMIs, you’ll pay off your loan faster and save money on interest. When you apply for a home loan balance transfer, you can choose a term that suits your needs.
Loan top-up:
When you choose to transfer your personal loans balance, you also gain access to top-up loans. Let’s take an example. Supposing you transfer an outstanding amount of 6 lakhs to a new lender. But you need an additional 4 lakhs to meet your criteria, you can simply receive that from your new lender. Your total loan amount will be 10 lakhs in this situation, and you will be charged EMIs accordingly.
Avail better terms on loans:
When transferring a personal loan balance. You can always choose a lender that offers the same loan at a lower interest rate. Whether it’s improved conditions on tenure, payment, pre-closure, or processing fees, we can help.
Eligibility criteria for a personal loan balance transfer
- The borrower must have completed the existing loan’s lock-in period, which is usually 12 months with most lenders.
- A track record of on-time EMI payments for the current loan.
- The CIBIL score is normally 700 or higher.
Apply for a personal loan balance transfer
- A borrower must obtain a NOC and a foreclosure letter from their present lender in order to apply for a personal loans balance transfer.
- Apply for personal loans with a new lender that allows you to transfer your balance.
- Obtain a sanction letter after being approved for a new loan.
- Receive payment from the new lender in the form of a check or demand draft payable to the existing lender. And deposit it with the existing lender.
- Check that your existing lender has canceled all of your cheques and ECS. And terminated your loan account once you get the check.
Conclusion
Before you apply for personal loans balance transfer, you should be aware of the following. The difference between the existing and new lender’s interest rates. Additional fees for your new loan, and the total savings you will realize.