Personal Loan Balance Transfer is the process of transferring outstanding debts from an existing loan account to a new account with another lender. Personal loan transfers are available with better offers that include lower prices and attractive features. The scheme benefits those who pay the most in their EMI loans or those who have a short term of employment. However, before using this, one needs to carefully consider the supply of balance and the total costs involved. Know more about personal loan balance transfer.
Why Personal Loan Balance Transfer?
Transfer Balance Loan Balance ensures that borrowers are not victims of heavy EMIs as it allows lenders to transfer their continuous loan to another lender at a lower interest rate. However, the borrower is also free to choose to transfer the remaining amount of his or her money if he or she is not satisfied with the services of the current lender. However, before you go there, you should check the total cost of the loan transfer, the savings you will make, and the terms.
Low-interest rates: The most important benefit you get from a personal loan – you can transfer your loan to a lower interest rate. Low-interest rates mean lower EMI and greater savings so you can focus on your other financial goals.
You can change your loan position: The transfer of your outstanding balance gives you the benefit of changing your loan period. Longevity means less EMIs, and a shorter term means higher EMIs, but this eliminates your loan quickly and can save interest. Therefore, if you want to transfer the home loan balance, you can choose to stay as you want.
Access to a higher credit facility: If you opt for a personal loan transfer, you get access to an additional credit facility. Let’s take this as an example – let’s say you transfer the remaining 4 lakhs to a new lender, but in case you need another 2 lakhs to meet your needs, you may find that easily fulfilled with your new lender. In this case, the amount of your loan will be around 6 lakhs, and you will be charged EMIs accordingly.
It can benefit from better loan terms: When looking for a personal loan transfer, you can always choose a lender who offers the same loan with better terms. It could be better terms regarding accommodation, payment, early closure or processing fees.
Terms of eligibility for personal loan transfers
- The borrower must have used the loan lock period available for at least 12 months by most creditors.
- A clean record of EMI payments for ongoing loans.
- The CIBIL rate, as required by the bank, is usually 700 or more.
How to Apply for a Personal Money Transfer?
- To apply for a loan balance, the borrower must obtain a NOC letter and foreclosure from the current lender.
- Apply for a personal loan with a new lender who offers a place to transfer the balance.
- Get a new loan approval and get a letter of punishment.
- Take payments from the new lender using the check/demand framework in favour of the existing lender and apply the same to the existing lender.
- After receiving a check from your existing lender, check that they have cancelled all checks with ECS and closed your loan account.
However, before applying for a personal loan, you should know- The difference in the interest rate of the existing lender and the new lender, the additional cost of your new loan and the total savings you will make.