Can I Balance Transfer a Personal Loan?
Last Updated : Jan. 6, 2017, 5:06 p.m.
Balance transfer became a big-name in the banking sector due to the increasing demand of customers just like you who began transferring their balances from one personal loan to another. As the personal loan transfer from one bank to another bank that gives better rates eases their financial concerns. So, if you are like – Can I balance transfer a personal loan? Well, the answer is a clear cut ‘yes’ you can. You can get your personal loan transferred from bank to another and not only save on interest but get higher loan amount as well. Who would not be tempted to go for such an offer? However, you must know the fact that there are many banks and lenders to choose from and all of them will offer you better rates.
Why do you need a personal loan balance transfer?
The main reason behind the balance transfer is that you get the opportunity to get a higher (Top-up loan) amount on your existing loan. Other than the higher loan amount, you get lower interest rates. So, if you want to transfer the balance and opt for top-up, you can get more money at lower interest rates and hence a handsome amount of savings in future, isn’t it amazing?
What are the steps to follow ?
So, how are you going to pick one? Here is the guideline that you must look at before applying for a balance transfer.
Personal loan balance transfer offers:
The first step toward transferring the personal loan is to check the best offers in the market. Some of the best personal loan balance transfer schemes in the present market are given by SBI, ICICI Bank, HDFC Bank, Axis Bank and Citibank. So, you can choose the bank that gives you the most attractive offer as per your suitability.
Calculate the total outflow:
Even if some banks try to attract you with reduced EMIs and increased tenure, you must know that your total outgo increases this way. So, compare the total outgo for both banks and then decide If there is no urgent need of money, prefer your current bank and try to pay off the loan if possible.
Check the processing fees and other charges:
The processing fee is a percentage of the total loan amount that benefits banks. Act smartly and calculate the charges in rupees as your bank might increase the foreclosure charges of your personal loan since it is about balance transferring. However, the processing fee is a matter of change depending on the profile of the customer.
Analyse collateral to the outstanding ratio:
If you have cleared the major part of your loan and need a lesser amount, do not let the new lender have your complete collateral. If you have a secured personal loan, offer your new bank a lesser amount of collateral and choose the amount lesser than your collateral.
Inspect the offer before accepting:
Do not get into any kind of frills that banks will generally show you, analyze whether you actually need them or not. The most common of all the gifts is a free credit card or a personal accident insurance or anything similar but make sure you accept them only if you need.
Go through the terms and conditions:
We are all educated enough to know that there are many terms and conditions in almost each and everything when it comes to buying or purchasing. However, when we ourselves are applying, we forget to read them and later feel cheated. So, read the terms and conditions thoroughly and then seal the deal.
Final shot:
Think about the pros and cons of the offer you are getting like why the lender is offering your lower rates and what this offer has for your benefits? Once you will be free from doubts, you will take the right decision for sure.
Personal Loan Balance Transfer Calculator
A personal loan transfer calculator is the calculator that takes in account the remaining loan amount of your existing personal loan, its rate of interest, loan tenure, the EMIs that you have paid and the new tenure you wish to choose.
For eg. If you are planning to do the personal loan balance transfer to HDFC bank with the below details:
Existing personal loan amount : Rs. 2 lakhs
Rate of interest : 12% p.a.
Tenure: 48 months
No. of EMIs paid : 30
EMI: Rs. 5,267/-
Tenure you wish to have on your HDFC Bank personal loan: 18 months
New details of your new personal loan are as follows:
New Interest Rate: 13.75% p.a.
New Loan Tenure: 18 months
New EMI: Rs. 5,337/-
Balance Transfer Personal Loan Interest Rate
The interest rates offered on the balance transfer facility are generally lower than the original rate of interest on a personal loan. Whenever you are applying for a personal loan balance transfer, choose the lender that gives lower rates as compared to your existing personal loan otherwise transferring the personal loan would not make much sense.
Personal Loan Balance Transfer from one bank to another
There are many banks that have the facility of transferring your personal loan. Some of the best balance transfer options for your personal loan that you can opt for are:
- Personal Loan Balance Transfer to SBI
- Personal Loan Balance Transfer to HDFC Bank
- Personal Loan Balance Transfer to ICICI Bank
- Personal Loan Balance Transfer to Axis Bank
- Personal Loan Balance Transfer to Citibank
So I hope now all the cobwebs related to your burning question, Can I balance transfer a Personal Loan, is cleared.