What is a Personal Loan Balance Transfer?
Personal Loan Balance Transfer is the process where the outstanding amount of your existing personal loan is transferred from one lender/bank to another one. Generally, this is done to avail better terms & offers including a lower rate of interest for your existing loan.
The main objective behind a personal loan balance transfer is to reduce your existing debt burden. A personal loan balance transfer reduces your debt burden gradually as it reduces your monthly payable EMI towards your loan.
But before you decide to go for it, proper research is a must to do things. Before you shift, you should have a clear idea that how worth it is to shift? Transfer only when you find a difference between your lender and the another one in terms of low-interest rate, better offers, or terms which suites you more then what is being offered to you by your existing lender.
Remember it’s never too late to transfer your personal loan to a better bank with a lower interest rate. But certain lenders have lock-in period, and some fees charged against the balance transfer. So, analyse all the terms and only then decide.
Choice-worthy Features & Benefits of Personal Loan Balance Transfer
Lowers the Rate of Interest:
The biggest advantage of a Personal Loan balance transfer facility is that the rate of interest of your loan is decreased, this, in turn, lowers the borrower’ EMIs which you need to pay towards your loan. Generally, one should go for a balance transfer only when the new lender is offering a lower rate of interest.
Extended Duration on the Loan:
When a Personal Loan is transferred from one bank to another the tenure period of the existing Personal Loan can be negotiated to be increased. One can get the tenure of the personal loan either extended or lessened depending on the personal requirements.
These benefits depend on your past payments made towards your existing loan, your CIBIL and on your profile as income and repayment capacity. Lenders may provide additional benefits like zero processing fees, a lower rate of interest or may wives off some EMI. Hence if you have a good record you may get some of these advantages.
Increment of loan Facility:
Many of the lenders offer top-up loan facility along with the Personal Loan balance transfer that too at a lower interest rate.
Lenders offer Flexible loan repayment options when you go for a balance transfer.
Top #3 Banks for Personal Loan Balance Transfer
1. Kotak Mahindra Bank
Kotak Mahindra Personal Loan Balance Transfer reduces your burden of existing debt as Kotak Mahindra bank provides you the facility to transfer your existing personal loan from any other bank to here. This will help you to reduce EMIs and save money per month.
Benefits which you get when you apply for a Personal loan balance transfer with Kotak Mahindra:
- One can apply for a personal loan with Kotak Mahindra through online process.
- Loan amount from ₹50000 up to ₹15 Lakhs can be availed
- Minimal documentation
- Excellent customer support service
- Hassle-free processing
- Quick disbursal of the loan amount
- Convenient options for the repayment
Interest Rate: 10.99% to 24% per annum
Processing fees: up to 2.5% + applicable taxes
Balance Transfer: Available
To-up loans: Available
Prepayment / Foreclosure: Allowed but after a Lock-in period for 12 months.
Foreclosure charges: 5% + GST on principal outstanding
2. HDFC Bank
HDFC provides you the facility to transfer your personal loan EMI to HDFC in an easy and hassle-free manner. Your loan will be processed and treated just as a new loan.
Transferring your personal loan to HDFC lowers your interest rate and hence the payable monthly EMIs towards your loan.
Benefits which you get when you apply for a Personal loan balance transfer with HDFC Bank:
- No security or collateral is required against this.
- Minimal documentation and smooth processing
- It can also be done online with most of the lenders
- Available at an affordable interest rate
- Additional top-up loan up loans is also available with most of the lenders when you go for a personal loan balance transfer.
- Fast processing and Quick disbursal of the loan amount
Interest rate: 11.50% – 21.50% per annum (on balance transfer)
Processing fees: up to 2.50% of the loan amount
Prepayment / Part payment: Allowed, but only after 12 months
Pre-payment charges: 13-24 Months – 4% of Principal Outstanding,
25-36 Months – 3% of Principal Outstanding
>36 Months – 2% of Principal Outstanding
Balance Transfer: Allowed
Top – up loans: Available
3. ICICI Bank
Struggling to pay the high EMIs for your personal loan? ICICI Bank offers you the facility to transfer your ongoing personal loan to an ICICI Bank. On your balance transfer, ICICI offers better benefits like lower interest rates, extended repayment time, and add-on offers too.
ICICI Bank personal loan balance transfer allows you to save you money which you would have paid on the high interest rate to your previous lender.
Benefits which you get when you apply for a Personal loan balance transfer with ICICI Bank:
- Your EMIs will get reduced when you transfer your existing personal loan to ICICI Bank.
- While you transfer your personal loan from any bank to an ICICI Bank, you can opt for an increased or decreased tenure period as per your repayment.
- Applying for ICICI bank personal loan balance transfer is quiet and simple and easy process.
- The bank does not charge any processing fee for balance transfer.
- The process is completely hassle-free which includes minimal documentation.
- Top-up personal loans are also offered when you transfer your existing personal loan to ICICI Bank.
Interest Rate: 11.50% onwards
Processing fees: Depends on the available offers
Prepayment: Allowed after 12 months
Pre-payment charges: 5% on the outstanding principal
Top-up loans: Available
Balance Transfer: Allowed
Part payment: Not allowed
Going for a personal loan balance transfer can save you from the hassle of applying for a fresh loan from a different lender. On the other hand it can reduce your Interest rate and can you can also opt for an increased tenure period while going for it. So, if you think you are paying more towards your personal loan do a research for other lenders with whom balance transfer is available. Go for it when you think it is worth or when you can save some money by going for it.