Taking a loan is easy but repaying it is one burdensome task which takes a toll on the borrower as the monthly instalments begin to be deducted from the total income. And a higher rate of interest is like an added baggage which you cannot let go off.
Often we get to know after some time paying the personal loans that there were or are some better personal loan options available from other banks that would have cost less or had a better tenure and other features that helped one to save on the hard earned money. The Personal Loan Balance Transfer gives you the opportunity to switch the outstanding balance amount of your loan from one existing bank to another offering a lower rate of interest. It is a great way to save interest and reduce monthly instalments.
Personal loan balance transfer has several benefits attached to it. These include:
- Rate on interest reduces to as low as 11.49%.
- EMI amount decreases by up to 10-25% with a balance transfer.
- One can also avail a top-up loan for meeting expenses like education, marriage, vacation, home improvement, medical etc or pay for credit card bills.
- Since these loans are collateral free and don’t require much documentation, they can be availed for up to 5 years.
- You can save a considerable amount which would otherwise have been given to the bank in lieu of interest.
ELIGIBILITY CRITERIA FOR PERSONAL LOAN BALANCE TRANSFER TO NEW BANK/LENDER
- Good Credit Score
- Regular track record of past 12 months EMI
- Minimum loan amount of Rs. 50000 should be transferred
- The personal loan applicant should be having a running personal loan with another bank
HOW IS PERSONAL LOAN BALANCE TRANSFER PROCESSED?
To transfer the personal loan from one lender to another, follow the steps given below:
- Do some research and look for the lowest interest rate on personal loan which you can get and on the basis of that calculate the saving on interest.
- Also, look into the transfer cost of the loan. Usually, when transferring personal loan from one bank to bank, there are processing fees and foreclosure charges(if any) involved. Sometimes these charges are a lot more and there is a possibility that you will end up paying more in the end if you transfer without a topup amount on the loan. So, calculate the net benefits before making the shift.
- Shortlist the banks and compare their interest rates, loan amount eligibility, processing fees and other charges.
- Once you have done all this and are sure to transfer the personal loan from existing to a new lender, you will have to apply for NOC and foreclosure letter from the current bank.
- Apply for a loan with a new lender and submit all the requisite documents.
- Get the sanction letter from the new bank and execute a new loan agreement.
- Your new lender will give disbursement in favour of the current bank through cheque or demand draft and additional top-up amount( if any demanded) will be credited to your bank account directly. Deposit the cheque/ demand draft with your present bank.
- Once your current bank will receive the loan outstanding, it will close your loan account and cancel all the ECS/cheques.
The whole process of personal loan balance transfer usually takes 4-8 days.
PERSONAL LOAN BALANCE TRANSFER CHARGES
Personal loan balance transfer charges differ from bank to bank. Basically, the applicant is supposed to pay the foreclosure charges to the existing bank and processing fees to the new bank which is low. The foreclosure charges vary from 0-2% depending upon the bank. The processing fee to be paid to the new bank ranges from Rs. 999 to 2% of the loan amount. Fintech enablers like LoansJagat help you to grab the best personal loan transfer deal by getting to compare the personal loan balance transfer offers from over 40 lenders including Banks and NBFCs. One may compare the personal loan balance transfer offers and choose the best one by evaluating the charges, interest rates, tenure and every other feature. LoansJagat also provides a dedicated loan relationship manager to help individuals get the best deal and get their documentation process completed simply, one may choose to get the documentation online or even in hard copies as per their choice.
DOCUMENTS REQUIRED FOR PERSONAL LOAN BALANCE TRANSFER
The applicant needs to submit the following documents to the new bank:
- Duly filled and signed application form along with passport size photograph
- Identity and age proof (PAN card/ passport, driving license/ Aadhaar card/ voter id card)
- Address proof (Electricity bill/ telephone bill/ Aadhaar card/ rent agreement)
- Salary Slips of last 3 months, and bank account statement of last 6 months
- Personal loan statement of the loan to be transferred.
LoansJagat helps you to choose the new bank as you can compare the rate of interest and repayment terms along with other charges on its online portal. Their representative guides you to smoothly make the shift from one bank to another.