Personal Loan Balance Transfer








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    Steps to a Balance Transfer with Your Loan Advisors
    Confirm current loan eligibility for transfer.
    Prepare requisite documents.
    Identify the Best Bank/ NBFC for the Transfer.
    Avail the transfer your Personal loan in the comfort of your premise
    Annual costs of a Person loan Balance transfer
    Rate of interest calculated @ reducing balance for the loan tenure 10.25% to 13.25%
    Rate of interest calculated per year 5.5% to 7.46%
    Processing fees 0.25% to 1%
    Tenure Allotted 12 to 60 months
    * Pre Closure, Part Payment, Other Charges Will Be Levied As Per The Individual Policy Of The Lender.
    Representative example of the annual costs of a Personal loan balance transfer
    Loan amount ₹ 2,00,000
    ROI reducing 11.00%
    ROI Flat 6.09
    EMI ₹ 4348.48
    Processing fees (one time) ₹ 1000
    Annual cost of the loan ₹ 52181.82
    Total cost of the loan ₹ 260909.08
     
    What does the term Balance transfer of a Personal loan mean?
    The term Balance transfer of a Personal loan is used to define the process of transferring an existing Personal Loan from the parent organisation to another Bank or financial Institution. The priority being that the Loan in question is being paid back successfully without any delays or bounces
    With this initiative the Banks taking over the Personal loan are assured of an increased turnover with a minimum default. To lure good customers & convince them to transfer their Loan account, better terms & conditions are offered such as a minimal Rate of Interest & processing fees.
    Benefits
    Features
    Eligibility Criteria
    Process
    Fees and Charges
    What are the benefits of a Personal loan Balance Transfer?
    Though it is advisable to take the Balance transfer of your personal loan at least once during the tenure, it can be particularly helpful in the following scenarios.
    For a lower Rate of Interest
    Banks offer the best rates available for a Personal Loan Balance Transfer to customers with a good track record of timely payments. Customers who are paying an inflated rate of interest should consider taking a Balance transfer of their personal loan as soon as permitted.
    Refer to the example below, depicting savings via a Balance transfer with a reduced rate of interest:
    Cost analysis of the existing Personal loan.
    Loan amount ₹7,00,000/-
    Repayment Tenure 36 months
    ROI @ monthly reducing balance 13.50%
    ROI applicable flat per year 7.39%
    Processing fees (one time) ₹7,000/-
    Monthly EMI ₹23,754.70
    Amount paid as interest over 36 months ₹1,55,169.24
    Principal amount repaid over 12 months ₹2,02,800.6
    Principal amount repaid over 24 months ₹4,34,738.54
    Principal amount repaid over 36 months ₹7,00,000
    Cost of a Personal loan for ₹ 7 lakhs ₹855169.24
    With a Balance transfer after 12 months
    Principal amount Balance ₹ 5,00,000
    Repayment Tenure applied 24 months
    ROI @ monthly reducing balance 10.50%
    ROI applicable flat per year 5.78%
    Processing fees (one time) ₹3,000/-
    Monthly EMI ₹23,188
    Amount paid as interest over 24 months ₹56,512.60
    Principal amount repaid over 12 months ₹2,02,800.64
    Principal amount repaid over 24 months ₹5,56,512.60
    Cost of a Personal for ₹ 7 lakhs with a Balance Transfer ₹7,93,456.58
    Cost of a Personal loan for ₹ 7 lakhs ₹61,712.66
     
    To reduce the current EMI
    If paying the current EMI is becoming a burden on your budget it is important to plan your finances. Reduce your stress with a balance transfer: a lower EMI can be achieved by a reduction in the rate of interest and increasing the tenure. Apply timely as default or delays in payments can spoil the repayment record and should be avoided at any cost.
    Demonstrated below is an example of EMI reduction via Balance Transfer
    Cost analysis of the existing Personal loan.
    Principal amount post balance transfer ₹7,00,000/-
    Repayment tenure applied 36 months
    ROI @ monthly reducing balance 13.50%
    Monthly EMI ₹23754.22
    Post a Balance transfer after 12 months
    Principal amount post balance transfer ₹5,00,000
    Repayment Tenure applied 36 months
    ROI @ monthly reducing balance 10.50%
    Monthly EMI ₹16251.22
     
    To get an additional loan amount or Top Up
    The rate of interest offered for a Balance transfer is also valid for additional funds approved as a Top Up. With a request for Balance transfers of your Personal loan apply for the extra amount you need, as a top up to the original loan amount. Get the additional funds in a single loan, with the lowest rate of interest.
    Given Illustration below shows the creation of eligibility for a Top up amount.
    Details of existing loan
    Loan amount ₹7,00,000/-
    Repayment tenure 36 months
    ROI @ monthly reducing balance 13.50%
    Monthly EMI ₹23754.22
    Post a Balance transfer after 12 months
    Principal amount post balance transfer ₹5,00,000
    Repayment Tenure applied 36 months
    ROI @ monthly reducing balance 10.50%
    Monthly EMI ₹16251.22
    With a Top amount of ₹ 3 lakhs
    Loan amount ₹8,00,000/-
    Repayment Tenure 48 months
    ROI @ monthly reducing balance 10.50%
    Monthly EMI ₹20,482.7
     
    To create additional eligibility
    All Banks have a system to calculate the maximum Loan amount that can be lent to a loan seeker. This loan amount is calculated as per the income earned & the total obligations including loan EMI’s & Credit Card outstanding.
    If at this juncture there is a plan to buy a new Home or a new Vehicle & an additional Loan is required, create additional eligibility by taking a Balance transfer, so that your new loan application is successful.
    FAQ’S
  • Who is eligible to apply for a Balance Transfer of their personal loan?
  • All existing Personal Loan holders who are running their personal loans successfully are eligible to apply for a balance Transfer. A principal loan amount of ₹ 50,000 should be balance to apply for a transfer.

  • When can a Balance transfer of an existing personal loan be availed?
  • A Balance transfer can be availed at any time during the tenure of a Personal Loan, the terms & conditions for the pre closure being fulfilled.

  • At what stage/time should the balance transfer of the Personal loan be taken?
  • Take a transfer of your loan soonest to gain the maximum benefits.

  • How much time does it take to achieve a Balance transfer of a Personal Loan?
  • The total time taken from the time an application is submitted, till the old loan is closed could take a week to 10 days, so plan your balance transfer with enough time in hand before the next EMI of the previous hits the account.

  • Is there a possibility that the request for a Balance transfer may be rejected?
  • The application for a Personal Loan Balance transfer will be processed by the Bank as for a fresh personal loan application, if it does not satisfy the terms & conditions as per the policy it may get rejected.

  • Will the CIBIL score be considered for a Balance Transfer?
  • Most Banks require a minimal CIBIL score for a personal loan approval; in case the personal loan in question has a record of timely payments, a lower CIBIL score may be accepted.

  • Are Personal loans running from all Banks and NBFC’S eligible for a Balance transfer?
  • The parent financer must be approved by the external Bank or NBFC for the takeover of the existing loan.

  • Can I change the tenure of my Loan post the Balance Transfer?
  • The request for a Balance Transfer is viewed as a fresh loan application. If the eligibility permits the applicant can request for tenure from 12 months up to 60 months, as per his ability to pay the EMI.

  • Is it possible to Balance Transfer multiple personal loans?
  • Yes, all the existing personal loans of an applicant can be transferred & clubbed under a single personal loan after the Balance transfer process.

  • Is the Balance Transfer of a Personal Loan always beneficial?
  • The Balance transfer of a Personal Loan is advantageous if it serves a specific need, or affects major savings. It is not always a good option, so do contact your loan advisors to give you a complete breakdown of the costs & savings before applying for a balance transfer.

  • What are the major costs of a Balance transfer?
  • The major costs of a balance transfer incurred are:

    The Pre closure Charges; these are the charges to be paid to the parent bank. They vary as per the policy of the Bank; these charges are calculated on the principal loan amount balance.
    The Processing fees; Most Banks charge a minimal processing fees for a Balance Transfer. The fees are calculated on the Loan amount approved.
  • Is it possible to apply to more than one Bank for a Balance Transfer?
  • Application for a Balance transfer can be forwarded to more than one Bank, but the same is not advisable as it can adversely affect your CIBIL score, so apply to a single Bank using our services to help you identify the right Bank fir the balance transfer of your Personal Loan.

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