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 Repaid 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.
Key Features for a Personal Loan Balance Transfer
The tenure allotted for a
Personal Loan Balance Transfer is from 12 to 60 months, granted on the basis of the loan amount sanctioned and the eligibility of the applicant to re pay the EMI.
Loan Amounts offered by leading Banks/NBFC’S for a Balance Transfer and
Top Up are from a minimum of ₹ 50k to a maximum of ₹ 30 Lakhs.
A
Personal Loan Balance Transfer is unsecured and offered without any security or guarantee, no mortgage is needed to secure funds via a
Personal Loan.
The Balance Transfer is processed on behalf of convenient documentation the income and KYC and documents giving details of the existing loan that are readily available.
To secure the Balance Transfer of a Personal Loan the CIBIL Score of the applicant must be above the required benchmark.
The Balance Transfer process is quick and convenient with complete documents provided the request is approved within 72 hours.
Terminology Used in The Process For a Personal Loan Balance Transfer.
We endeavour to make it simple for your convenience, explained below are common terms used in the Balance Transfer process.
Balance Transfer
A Personal Loan Balance Transfer is a process wherein a customer transfers the total outstanding Personal Loan from one bank to another. It is usually done for better terms and benefits.
Principal Loan Amount
The Principal Loan amount refers to the Original Loan amount which has been borrowed from the Bank. The principal loan amount reduces with the payment of the monthly EMI.
The balance outstanding of the principal loan amount will be taken over when affecting the Balance Transfer of a Personal Loan.
The Loan Track
An applicant can request for the Loan Track of the Existing Personal Loan from the concerned Bank. The track of a Personal Loan gives details of the status of the Personal Loan including.
The Loan Amount Disbursed
The Repayment Tenure Applied
The Number of EMI’S Paid To The Bank Successfully/Pending/Bounced
The Total Loan Amount Paid Back To The Bank.
The Principal Balance Outstanding
Top Up Amount
Requirement for any additional amount can be applied for with the request for Balance Transfer this amount is known as a Top Up. Thus the loan amount applied will include the principal balance of the previous loan amount and the Top Up. The Rate of interest & other terms & conditions applicable for a Balance Transfer will be valid for the total loan amount.
Pre Closure
If a
Personal Loan holder wants to return the loan amount borrowed from a Bank or a financial institution before the completion of the loan tenure it is called a pre closure.
The pre closure of a Personal Loan is governed by the terms of the Personal Loan agreement .The policy for pre closure varies as per the rules and regulations of different Banks. The condition being of a minimum number of EMI's to be paid before the applicant can pre pay the Loan amount. The loan will only be eligible for a Balance Transfer if the pre closure terms are met.
The Eligibility Criteria For Personal Loan Balance Transfer
Following is the criteria generally applied to applicant seeking a Balance Transfer for their Existing Personal Loan, though each lender may have their own terms and conditions.
Minimum amount accepted for a Balance Transfer is 50k, thus the principal amount balance of the existing personal loan should be more than 50k.
The terms & conditions for pre closure as stated in the personal loan agreement should be fulfilled. The applicant should have repaid the number of EMI’s mandatory to facilitate a pre closure.
The repayment track of the personal loan in question must be clear with an on time repayment record.
The CIBIL Score of the applicant must be above the required benchmark. The other credit lines being used by the applicant should have satisfactory repayment history.
The applicants profile should be acceptable as per the terms and conditions of the external Bank.
What is the criterion of a ‘Top Up’ with a Personal Loan Balance Transfer?
An applicant seeking to transfer a Personal Loan to an external Bank can apply for an additional loan amount as a Top Up the major features include the following.
The loan amount granted as a Top Up will be calculated as per the eligibility criteria of the Lender.
The loan amount granted as a Top Up will be transferred directly to the applicants salary account after the completion of the transfer.
A single Emi is instated for the total loan amount sanctioned for a Balance transfer and the Top Up amount.
The Top Up is offered at the same reduced rate of interest applied to the Balance Transfer.
The loan amount sanctioned as a Top Up can be used to pay pre closure charges for the existing loan or for any valid personal requirement.
Check List For a Successful Personal Loan Balance Transfer.
For the successful Balance Transfer it is advisable to check the following prior to applying:
Identify the Financer for the Balance Transfer
Our Advisors will help you study the market offering and identify the most suitable financer for your Balance Transfer offering the lowest rate of interest.
Calculate The Cost of The Transfer
If the Balance Transfer is being appended for savings, calculate the financial implications. Charges in question will be.
Amount To Be Paid as The Pre Closure Charge if Applicable.
The EMI Post The Balance Transfer and the Total Cost of The Loan.
The Processing Fees For The Transfer.
Verify Pre Closure Terms of Your Personal Loan
Confirm if the parent Bank permits the transfer i.e. that the minimum no’s of EMI’S to be paid as per the pre closure clause of the personal loan agreement and obtain a NOC.
Facilitate Your Application Well Before Your Next EMI
It is practical to process your Balance Transfer with enough time in hand so that the process for transfer is completed without undue stress and the principal amount is paid back before the next EMI is presented.
Apply To The External Bank
Having checked the pre requisites and worked out the savings advantages of the
Personal Loan Balance Transfer “Your loan advisors” are well placed to suggest to you the appropriate Bank /NBFC to further your request.
The Process For The Balance Transfer of a Personal Loan is as Follows.
Following are the Stages to a Successful Balance Transfer of a Personal Loan.
The Process for Application of Personal Loan Balance Transfer.
1.
Obtain the loan track of your existing loan to determine the Principal balance of the existing loan. The loan track will establish the number of EMI’s paid the principal amount repaid.
2.
Finalize the loan amount to apply for this includes the principal balance of the existing loan, for pre closure charges and any additional amount needed for personal usage.
3.
Complete all documentation requirements, and submit to the Bank. It is important to give authentic and clear copies to expedite the loan process.
4.
The Bank will process the loan application as per its regular verification & approval procedures.
5.
The final decision will be communicated to the applicant, if the request is approved a loan agreement is initiated with all the terms and conditions.
The Process for Disbursal and Takeover of The Existing Loan
1.
A Bankers draft or pay order is made in the name of the parent Bank for the principal balance due and handed over to the applicant.
2.
The applicant is required to close the existing loan by depositing the draft clearing all dues and obtaining a closure letter.
3.
After the proof of closure is submitted to the financer taking over the loan, the process for transfer is completed.
4.
Any additional amount approved as a Top Up will be transferred directly to the applicant’s Bank account.
5.
A fresh EMI will now be presented to the applicants account henceforth.
6.
This completes the process for the closure of your existing Personal Loan & start of your new loan account.
What are The Charges For a Personal Loan Balance Transfer?
Rate of Interest
The
Rate of Interest is the primary charge for the loan amount forwarded as a Balance Transfer the rate of interest remains constant for the entire tenure. Lenders offer attractive rates to eligible clients for the takeover of the existing loan.
Processing Fees
The processing fee is a one-time file charge which is deducted from the loan amount disbursed. The processing fee charged is as per a fixed slab or a percentage of the loan amount as per the individual policy of the lender.
Pre Closure Charges
The applicant may have to pay a charge for the closure of the existing loan. The charge can be up to 3% of the principal balance of the existing loan this amount may be paid by the applicant from personal funds or included in the loan amount.
| Bank/NBFC |
Interest Rate |
Processing Fees |
Tenure |
Loan Amount |
 |
10.40% to 12.50% |
₹ 2999/- to ₹ 3999/- |
12-60 months |
₹ 25 lakhs |
 |
10.75% to 13% |
₹ 1000/-to ₹ 6000/- |
12-60 months |
₹ 25 lakhs |
 |
10.40% to 12.99% |
₹ 3999/- |
12-60 months |
₹ 25 lakhs |
 |
10.50% to 10.99% |
₹ 3999/- |
12-60 months |
₹ 25 lakhs |
 |
10.45% to 10.99% |
₹ 1000/- to ₹ 9999/- |
12-60 months |
₹ 25 lakhs |
 |
10.45% to 10.99% |
₹ 2999/- to ₹ 3999/- |
12-60 months |
₹ 25 lakhs |
91-9711165183
