It is no wonder that personal loan balance transfer help you obtain funds for all expenses, be it medical emergencies or leisure spending, with flexible repayment tenures. But what do you do when you find another lender offering the same loan with a lower interest rate? You feel turmoil and urge to find a way to shift to that lender without hindering paid EMIs.
It’s not an issue; you can now opt for a personal loan bank transfer to achieve this. In the section below, we’ll discuss whether the loan transfer is the right choice for you.
What is a Personal Loan Balance Transfer?
A personal loan balance transfer shifts the outstanding balance of your existing loan to a new lender, typically at a lower interest rate. This option can significantly benefit borrowers by reducing the overall interest burden, leading to substantial savings over time. By transferring your balance, you not only ease your monthly debt load but also simplify your financial management.
How are Personal Loan Balance Transfer Beneficial?
Transferring a balance transfer of personal loan to another bank can be beneficial; here is how:
Your interest rate would reduce.
Transferring your outstanding loan balance to a different one with a lower interest rate would help you reduce the weight of your EMI, making room for better savings.
Expanded repayment timeline
With the new lender, you would have an option to extend your repayment period. It would view your transferred balance as a new loan and allow you to negotiate for a longer repayment tenure.
Top-up loan availability
It can offer you the perk of obtaining additional funds from the new lender (bank) without securing a new loan from scratch.
Better services
Once you switch, you will benefit from better services than your previous bank. For instance, you can go with the lender that sends you EMI payment reminders, timely updates, and more if your existing lender does not offer them.
More promotional offers
The new lender might offer promotional offers like discounted processing fees or waivers on the last EMI. These can make your loan transfer more beneficial even when the offers are limited, and your eligibility needs to meet their terms and conditions.
How do you Apply for a Personal Loan Bank Transfer?
The steps to apply for a personal loan balance transfer are below:
- Compare: Compare the interest rates, services, and promotional offers provided by the bank you are interested in.
- Estimate the Incurred Cost: The estimated personal loan bank transfer costs include processing fees and prepayment charges.
- Choose a lender: Pick the bank that best suits your needs.
- No Objection Certificate: Take your NOC and the current lender’s foreclosure form.
- Apply: Apply online or through the branch for a ‘Personal Loan Bank Transfer’ and submit the required documents.
- New Loan Agreement: Once your application is approved, you will receive a sanction letter where you need to sign a new loan agreement.
- Outstanding Loan Disbursement: After the balance transfer of the personal loan, the new lender settles the outstanding loan with the previous bank.
- Closure of Account: Once your last lender receives the payment, your account will close, and any cheques from ECS will be canceled.
Conclusion
A personal loan balance transfer can be an excellent option for those looking to save money and improve their financial flexibility. By shifting your outstanding balance to a lender offering a lower interest rate, you can significantly reduce your monthly EMIs and overall interest burden.
Evaluate your options carefully, and take the steps necessary to regain control over your financial future today.
