Personal Loan Balance Transfer

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For the Balance transfer of a Personal Loan
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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 of your loan in the comfort of your premises.
Annual costs of a personal 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-closing, part payment, and other charges will be levied per the lender's policy.
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?
Balance transfer of a Personal loan is defined as transferring an existing Personal Loan from the parent organisation to another Bank or Financial Institution. The priority for balance transfer is returning the loan successfully without delays or bounces.
With this initiative, banks taking over Personal loans are assured of an increased turnover with a minimum default. Better terms and conditions, such as a minimal rate of interest and processing fees, are offered to lure good customers and convince them to transfer their Loan accounts.
Eligibility Criteria
Fees and Charges
What are the benefits of a Balance Transfer Personal Loan?
It is advisable to transfer the Balance of your loan at least once during the tenure; it can be beneficial 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 paying an inflated interest rate should check for the personal loan balance transfer lowest interest rate and consider transferring their 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 14.50%
ROI Applicable Flat Per Year 7.97%
Monthly EMI ₹24,094.68
Amount Paid as Interest Over 36 Months ₹167408.63
Principal Amount Repaid Over 36 Months ₹7,00,000
Cost of a Personal Loan For ₹ 7 Lakhs ₹867408.63
With a Balance transfer after 12 months
Principal Amount Balance ₹ 5,00,000
Repayment Tenure Applied 24 months
ROI @ Monthly Reducing Balance 10.99%
ROI Applicable Flat Per Year 5.92%
Monthly EMI ₹23,301.60
Principal Amount Repaid ₹200622.39
Amount paid as interest over 24 months ₹59,238.35
Cost for ₹7 lakhs with a Balance Transfer 7,59,861.00
Savings with a Balance Transfer ₹1,07,547.63
To reduce the current EMI
If paying the current EMI is becoming a burden on your budget, it is essential to plan your finances. Reduce your stress with a balance transfer: a lower EMI can be achieved by reducing the interest rate and increasing the tenure. Apply timely, as default or payment delays can spoil the repayment record and should be avoided at all costs.
Demonstrated below is an example of EMI reduction via a Balance Transfer
Details of existing personal loan
Loan amount ₹7,00,000/-
Repayment Tenure 36 months
ROI @ Monthly Reducing Balance 13.50%
Monthly EMI ₹23754.7
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 personal loan balance transfer interest rate is also valid for additional funds approved as a Top-up. When you request balance transfers of your loan, apply for the extra amount you need to top up the original loan amount. Get the additional funds in a single loan with the lowest interest rate.
The 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 ₹23754.70
Post a Balance transfer after 12 months
The 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 ₹20,482.70
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 per the income earned & the total obligations, including loan EMI’s & Credit Card outstanding.
If you plan to buy a new home or a new Vehicle at this juncture and need an additional Loan, create additional eligibility by taking a Balance transfer so that your new loan application is successful.
We are ready to answer all your queries about the Balance Transfer programme. Some FAQs are explained here under.
  • Who can apply for a Balance Transfer of their loan?
  • All existing Personal Loan holders running their loans successfully can apply for a balance Transfer. To apply for a transfer, a principal loan amount of ₹ 50,000 should be the balance.

  • When can a balance transfer of an existing personal loan be made available?
  • A balance transfer can be made any time during a personal loan's tenure, provided the pre-closure terms and conditions are fulfilled.

  • At what stage/time should the personal loan balance transfer be taken?
  • Take a transfer of your loan as soon as possible to gain the maximum benefits.

  • How long does achieving a Personal Loan for Balance transfer take?
  • The total time taken from the time an application is submitted until the old loan is closed could take a week to 10 days, so plan your balance transfer with enough time before the next EMI hits the account.

  • Is there a possibility that the request for a Balance transfer may be rejected?
  • The Bank will process the Personal Loan Balance transfer application as a fresh personal loan application. To be accepted, it must satisfy the terms and conditions as per the policy.

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

  • Are Personal loans from all Banks and NBFCs eligible for a Balance transfer?
  • The external Bank or NBFC must approve the parent financer to take over the existing loan.

  • Can I change my loan tenure after the balance transfer?
  • The request for a Balance Transfer is viewed as a fresh loan application. If eligibility permits, the applicant can request a 12—to 60-month tenure, depending on his ability to pay the EMI.

  • Is it possible to balance and transfer multiple personal loans?
  • After the balance transfer, an applicant's existing personal loans can be transferred and clubbed into a single personal loan.

  • Is the Personal Loan Balance transfer always beneficial?
  • A balance transfer of Personal Loan is advantageous if it serves a specific need or affects significant savings. However, it is only sometimes a good option, so contact your loan advisors for a complete breakdown of the costs and savings before applying for a balance transfer.

  • What are the significant costs of a Personal loan Balance transfer from one Bank to another?
  • The significant costs of a balance transfer incurred are;

    The pre-closure Charges are the charges to be paid to the parent bank. They vary according to the bank's policy and are calculated on the principal loan amount balance.
    The Processing fees: Most Banks charge minimal processing fees for Balance Transfers. The costs are calculated based on the Loan amount approved.
    It is advisable to check the costs using a personal loan balance transfer calculator beforehand.
  • Is applying to more than one Bank for a Balance Transfer possible?
  • Application for a Balance transfer can be forwarded to more than one Bank. Still, 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 for the balance transfer of your Loan.

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