Are you tired of paying high EMI on a personal loan?
How about financial assistance which can release your burden?
With Personal Loan Balance Transfer, you can transfer the remaining principal loan amount to another bank. As the interest rate varies from one bank to another, you now have the option to choose the bank with a low-interest rate on a personal loan. By doing so, you can easily get rid of the burden to pay high EMI. With the financial service like personal loan balance transfer, you can save a lot of personal loan repayment and also, use the saved money for various purposes.
What is a Personal Loan Balance Transfer?
A Personal Loan Balance Transfer is a financial service through which you can transfer your remaining personal loan balance to another lender. This is done to reduce the interest rate that is being charged on the loan amount. Firstly, this service was developed for credit cardholders. As soon as it got popularity among various users, banks and NBFCs started providing this service to loan borrowers too.
Personal Loan Balance Transfer helps you in choosing the best way for yourself to repay the loan amount. To do so, you will have to pay very minimal charges to your existing lender as well as to your new lender. The charges are foreclosure fee to your existing lender and processing fee to a new lender and that varies from one lender to another.
Is Balance Transfer of a Personal Loan a Good Idea?
Many of us believe that transferring a balance of the personal loan is a bad idea because it will lead to a bad relationship with the existing lender. But that’s just one side of the coin. The other side is about numerous benefits you can avail by transferring your personal loan balance to another lender. They are –
- Your Personal Loan Interest Rate will decrease by a considerable margin.
- Your Personal Loan EMI will be reduced by 5-8%.
- It may also improve your credit score.
- You can top-up your loan amount if needed.
- You can avail the whole new services and offers as you will be choosing a new lender.
Personal Loan Balance Transfer Interest Rate
|BANK/NBFC||Interest Rate||Processing Fees range||Loan Amount||Tenure Range|
|HDFC||11.29% onwards||INR 1499||25 Lacs||1-5 Years|
|ICICI||11.69% onwards||INR 1499||25 Lacs||0.6-5 Years|
|IndusInd||2-3% Reduction on existing Rate||1-2%||25 Lacs||1-5 Years|
|Bajaj||2-3% Reduction on existing Rate||1-2%||25 Lacs||1-5 Years|
|IDFC First||11.69% onwards||1%||25 Lacs||1-5 Years|
|TATA Capital||2-3% Reduction on existing Rate||1-2%||25 Lacs||0.6-6 Years|
|Kotak Mahindra||11.79% onwards||1-2%||25 Lacs||1-5 years|
|RBL||2-3% Reduction on existing Rate||1-2%||25 Lacs||1-5 Years|
|CITI||10.99% onwards||1-2%||25 Lacs||1-5 Years|
It is important to understand that the interest rate mentioned above is just the interest rate that these banks charge on a personal loan. While transferring your personal loan balance, you may or may not have to give an interest rate that is mentioned above. Usually, the bank facilitates a reduction of 1-2% interest rate at the time of personal loan balance transfer.
Personal Loan Balance Transfer Calculator
Through personal loan balance transfer calculator (BT Calculator), you can check how much you will be saving if you opt for a personal loan balance transfer. It gives a brief idea about the new EMI, per month saving and the total savings.
For example – Suppose, Sunidhi is paying EMI of Rs. 23,268 for a personal loan of Rs. 10 lacs at 14% that she took for 60 months and she has already paid 12 instalments. If she opts for personal loan balance transfer for 12% interest rate, she will be paying Rs. 22,422 every month for the remaining time period.
Although it seems like a mere reduction of Rs. 846 on monthly EMI yet it is effective in both short and long terms. As Sunidhi has already paid 12 instalments, now she has to pay only 48 instalments. And in 48 months, she will be saving 48*846, which is around Rs. 40,000. With that 40,000, she can travel to her favourite place, invest in FD and mutual funds, etc.
Eligibility Criteria for Personal Loan Balance Transfer
To transfer your personal loan balance, you have to meet various eligibility criteria laid by your existing as well as the new lender. The eligibility criteria depend on various factors like age, repaying capacity of the borrower, job stability, credit score, etc. One bank to another, it changes with other criteria also taken into consideration. Some of the basic eligibility criteria for personal loan balance transfer are –
- The remaining loan amount should be more than Rs. 50,000.
- Loan repayment history should be good and he/she shouldn’t be a credit defaulter.
For more information regarding personal loan balance transfer, you may contact you’re the bank of your choice through online means or by visiting the bank.