What is a Balance Transfer?
A balance transfer is the process of transferring outstanding balance of a loan from one bank to another. A loan is transferred to save interest and reduce EMIs by switching to a low rate personal loan as well as to avail additional top up loan from the new bank.
Balance Transfer Personal Loan
Balance Transfer of personal loan entails multiple benefits to the borrowers, which include You get lowest interest on personal loan balance transfer starting @ 11.49% You can reduce your EMI outgo by 5 – 8% by transferring personal loan You can also avail top up loan to pay down high cost credit card dues or meet any other personal expenses such as travel, vacation, medical, marriage or even purchasing a car You can get quick personal loans of up to 5 years with minimal documentation and without any guarantor
Savings on balance transfer
Suppose, you have an existing personal loan outstanding amount of Rs. 2 Lakh for a tenure of 48 months. You can transfer your existing personal loan to a new bank at lowest rates. By transferring a 4 year personal loan of Rs. 2 lakh from 14.5% to 11.49%, your EMI can reduce from Rs. 5,516 to Rs. 5,217. Total savings on interest after balance transfer is Rs. 14,340.
What are the eligibility criteria for personal loan transfer to new lender?
Applicant must have a running personal loan from another bank Loan amount being transferred should be at least Rs. 50,000 Clean EMI payment track record of at least 12 months CIBIL Score required as per bank policy, typically 700 and above
Documents Required for Personal Loan Transfer
Filled application form with passport size photograph duly sighed Identity and age proof (PAN card/ passport, driving license/ Aadhaar card/ voter id card) Address proof (Electricity bill/ telephone bill/ Aadhaar card/ rent agreement) Last 3 months salary slip, and last 6 months bank account statement Personal loan statement of loan to be transferred
FAQs on Personal Loan Takeover
1) Who can avail the balance transfer and top-up of personal loan?
Any borrower with existing running personal loan on which he or she has paid at least 12 EMI’s regularly are eligible to balance transfer their loan to another bank and also avail top up loans at the time of loan transfer.
2) When should I avail the personal loan balance transfer?
In case you are paying an interest rate on your personal loan which is higher than those available in the market and the difference is more than 0.5% to 1%, you should consider the option of transferring your loan to a new bank.
3) What is the time duration for transfer of loan?
Your loan transfer formalities like getting NOC, foreclosure letter, applying and getting a sanction from new bank and getting the loan balance transferred to new bank can take up to 4-8 days.
4) Do I have to submit any security or collateral for personal loan?
No, there is no need of security or collateral for personal loan.
5) What is the loan tenure for the balance transfer of personal loan?
The repayment period for loan is around 12 to 60 months i.e. 1-5 years.
6) What are charges on the transfer of loan?
Apart from rate of interest, other charges include: Processing fee payable to new bank Pre-payment or foreclosure fee payable to existing bank Stamp duty on loan agreement in some states