Finance

Save on your EMIs by Opting for a Personal loan Balance Transfer

author-img By Mashum Mollah 3 Mins Read August 19, 2021 Last Updated on: January 2nd, 2025

Personal loan Balance Transfer

Personal Loan Balance Transfer is essentially the transfer of an outstanding loan from a pre-existing personal account to a new account with another lending institution.

This process is a means of switching to a better arrangement which may include beneficial features and lower rates on interest. Borrowers who have shorter tenures or have to pay more on the EMIs for personal loans favor this option. However, if you do get a personal loan and wish to avail of a personal loan balance transfer at some point, it is crucial to understand the total costs and offers involved.

Benefits of Personal Loan Balance Transfer

Benefits of Personal Loan Balance Transfer

A personal loan balance transfer can save you from burdensome EMIs and switch to a better option. Here are a few plus points:

1. Lower interest rates:

Arguably the biggest benefit is the ability to switch to a loan with a lower interest rate, lower EMI amounts, and more savings. This will help protect your finances.

2. Changeable loan tenure:

You can also change the tenure period of your loan, which will then reduce your EMIs by spreading out the repayable amount. However, remember that a shorter tenure ends loans faster so pick the tenure as per your financial goals.

3. You can avail of the top-up loan facility:

You can top up your outstanding amount when you switch to a new lender and you will be charged EMIs for that new amount from that point onwards.

4. Potentially better loan terms:

While undergoing the transfer, you can opt for a loan option that gives you the same or similar benefits for better terms. These can be tenure, pre-closure, payment, or processing fee terms.

Eligibility Criteria for Personal Loan Balance Transfer

Eligibility Criteria for Personal Loan Balance Transfer

  • The borrower has to serve the existing loan’s lock-in period (generally 12 months minimum) before applying for transfer.
  • Good EMI repayment history for existing loans.
  • CIBIL score or credit score above 700/750.

Application for a Personal Loan Balance Transfer

Application for a Personal Loan Balance Transfer

The primary documents required for personal loan balance transfer include a NOC as well as a foreclosure letter from the lender for the existing loan. You can then submit an application to a new lender, get it approved, and procure the sanction letter. The disbursement can be obtained from your new lender in favor of your existing lender and deposited. On receiving the cheque, ensure that all the ECS and cheques in your loan account with the existing lender have been canceled.

In conclusion

Assess all these factors, the eligibility criteria, and the better loan options in the market before you make the decision to carry out a transfer. You can browse a variety of options on online platforms like Finserv MARKETS to find the loan best suited to your needs. Make sure to factor in the savings or charges associated with the transfer.

FAQs

1. What is a good CIBIl/credit score?

-A credit score of 700 or 750 and above is considered good. (A personal loan can be used to build a good credit)

2. What is the main benefit of a personal loan balance transfer?

-A lower interest rate is the main benefit

3. What documents do I need for the personal loan transfer?

-You need a NOC and foreclosure letter from the old lender.

4. Where can I find a wide range of loan options in one place?

-Finserv MARKETS is a one-stop platform for a wide range of loan options.

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Mashum Mollah

Mashum Mollah is an entrepreneur, founder and CEO at Viacon, a digital marketing agency that drive visibility, engagement, and proven results. He blogs at MashumMollah.com.

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