Save Big on Interest: Switch to a Lower-Rate Personal Loan with Balance Transfer
Save Big on Interest: Switch to a Lower-Rate Personal Loan with Balance Transfer
If given a chance, you will definitely switch to a competitive interest rate with better refinancing options available in the market. You can enjoy lower interest rates that financial institutions offer using the Personal Loan balance transfer option.

Save Big on Interest: Switch to a Lower-Rate Personal Loan with Balance Transfer

There are high chance that you might not be satisfied with the current offered interest rate. If given a chance, you will definitely switch to a competitive interest rate with better refinancing options available in the market. You can enjoy lower interest rates that financial institutions offer using the Personal Loan balance transfer option. Instead of paying a higher interest rate with the current lender, you can switch your loan balance to another lender with better interest rates. 

 

Understanding Personal Loan Balance Transfer

If you find a new lender with lower interest rates, you can transfer the outstanding Personal Loan from the existing lender to the new lender. This process will reduce monthly EMIs and the total loan cost. 

 

Generally, Personal Loans are offered without any collateral. Similarly, the Personal Loan Balance Transfer also doesn’t require any collateral.

 

Benefits of Personal Loan Balance Transfer

The essential goal with a loan balance transfer is to save money while paying off your loan. Some of the reasons why a balance transfer might be a good choice are:

 

  • Lower interest rate – When a new lender offers a significantly lower interest rate, it will help you reduce the loan cost drastically. 

  • Loan negotiation – By transferring your loan balance, you can renegotiate loan terms. You can choose a more comfortable repayment plan and extend the loan tenure to reduce your monthly EMIs. 

  • Loan features – Based on your new income dynamics, many NBFCs provide better loan features, such as zero transaction fees, waiving last EMI, lower processing charges, etc.

  • Top-up loan – You can also get a top-up loan when you transfer your loan balance. You can ask the lender how much loan can I get and increase your credit without paying higher EMIs. 

  • Employment-based scheme – Several lenders partner with renowned companies, offering better loan terms for the firm employees. You must not miss out on such offers. 

 

Evaluating Personal Loan Balance Transfer Costs

While switching to a new lender with lower interest rates is enticing, you have to evaluate the associated costs to ensure that you will get cost benefits. 

 

With the best Personal Loans, the EMIs you pay usually go towards loan interest. So, transferring your loan balance during the first half of your loan tenure can bring you a significant cost advantage. This is true even if the difference in the interest rate is just 1%.

 

However, there are some charges to consider before choosing to refinance your Personal Loan. To close the existing loan, you have to pay foreclosure charges. The new lender also charges a processing fee to transfer the loan balance. You may also have to pay stamp duty if applicable. You must always ensure no hidden charges with the new lender.

Also Read: COMPARING PERSONAL LOAN INTEREST RATES: FINDING THE BEST DEAL

How To Choose a Lender for a Loan Balance Transfer?

Expand your scope beyond traditional lenders and look for NBFCs with better offers when you decide to choose loan refinancing. Some of the factors to consider while evaluating balance transfer are:

  • Prevailing market conditions concerning interest rates.

  • Dynamics of the new loan scheme

  • Compare features, rates, and terms of multiple lenders.

  • Eligibility criteria with the new lender

  • Hassle-free Personal Loan balance transfer process

 

You should always look for a lender that requires minimal document processing so that you can start benefiting from the lower interest rate. Always read the fine print and ensure you avail in the lower interest rate. 

 

Conclusion

The entire Personal Loan balance transfer process takes about 2-4 weeks, depending on your chosen lender. The new lender will verify your documents and approve the balance transfer. They liaise with your current lender to disburse the outstanding loan. Only then your current lender will close your Personal Loan account. Then, you must pay EMIs to your new lender based on the new terms and conditions. 



FAQs

  1. Is there a minimum requirement for a Personal Loan balance transfer?

Generally, lenders require you to have an outstanding balance of ₹50,000 for a loan balance transfer. However, this requirement varies with lenders. You have to check with the new lender for the current requirements. 

 

  1. What should be my CIBIL score to transfer my loan balance?

 

A CIBIL score of 700 is considered ideal for a loan balance transfer. Having a good repayment record will help you to secure lower interest rates. 

 

What's your reaction?

Comments

https://www.timessquarereporter.com/assets/images/user-avatar-s.jpg

0 comment

Write the first comment for this!

Facebook Conversations