Top Features and Benefits of Personal Loan Balance Transfer in India

Top Features and Benefits of Personal Loan Balance Transfer in India

A Personal Loan Balance Transfer is a great source of financial help, which comes with a plethora of outstanding advantages such as low-interest rates, reduced EMIs, maximum loan amount and improved credit/cibil score. Both salaried professionals, as well as self-employed individuals/professionals, can avail this credit facility, after continue repaying their loan till 9 months or 1 year with the existing lender. Do not get attracted by looking at the lure offers, instead become a calculative borrower. Always keep in mind certain factors such as when to avail a balance transfer and how beneficial it is for you in the long run. Be a smart borrower to reap the maximum benefits offered by personal loan balance transfer. 

What is Personal Loan Balance Transfer?

A personal loan balance transfer is a process where an existing customer/loan borrower transfers his outstanding balance(remaining loan amount) to another bank or NBFC. A borrower primarily opts for this facility to enjoy a better rate of interest provided by a new lender. Doing so, leads to pocket-friendly EMIs. Thus, helps in reducing the personal loan burden. After opting for a balance transfer, a borrower is now liable to a new lender and will continue repaying his loan to a new lender. Here, a borrower also needs to pay a one-time processing fee of the outstanding loan balance to a new lender.  

Who is Eligible for Personal Loan Balance Transfer

Both Salaried Professionals and Self-employed Professionals/Individuals can avail personal loan balance transfer. Make sure your cibil score is good and you will fulfill the minimum income required criteria set by the lender. Though different lenders have different norms, related to personal loan balance transfer. Make sure you meet the required personal loan eligibility criteria set by the lender to avail this facility.    

Read Also-

Personal Loan Interest Rates Online 2020

How to Avail Personal Loan Balance Transfer-Know the Process

Apply online to opt for a personal loan balance transfer. The online process is really simple and quick, hence is preferred by many. A borrower needs to follow just 4 easy steps to avail a personal loan balance transfer. 

Take a look at the steps below:

Step 1: Apply Online at Quikkloan

Step 2: Get Quotes

Step 3: Submit Documents

Step 4: Instant Approval & Disbursals

When to Take Personal Loan Balance Transfer?

Now here comes the most important question.i.e when to go for a personal loan balance transfer? Consider opting for a balance transfer under any of the following scenarios:

1. When the Rates & EMIs are Higher: If your existing lender has the higher personal loan interest rates, going for a balance transfer would be advisable here. A competitive interest rate will reduce your overall loan repayment burden. Yes, reduced interest rates are directly linked to your EMIs, a slight change in rates can bring a lot of difference in monthly installments. Thus, under such a situation of lower interest rate, a borrower can expect the EMIs affordable, hence a less loan repayment burden. 

2. When the Tenure is Short: A short tenure means a high repayment burden. Yes, if your loan tenure is short which means the amount of your monthly installments is high. And, within that short tenure, a borrower needs to repay the loan with higher EMIs. So, opt for a lender, providing longer tenures so that your EMI amount will be reduced. Thus, less burden on your shoulder as far as repayment is concerned. 

3.No Additional Loan Amount: Need extra funds to fulfill your needs? If the existing loan amount is not enough to meet your purpose, go for a balance transfer. Make sure your new lender offers a higher loan amount compared to the existing one. Also, the amount should be enough to meet your needs. Here, a borrower can also ask for a top-up loan from a new lender. Under which, additional money(certain loan amount) will be given on an existing loan amount. However, not all lenders offer the Top Up facility, kindly check the same before applying to your new lender. 

4. Services are Less: Looking for better customer services and privileges? Personal Loan Balance Transfer is you need. In case you are not satisfied with the services being offered by your existing lender, a balance transfer is here. Do some research and find an ideal lender, meeting your needs and have a hassle-free personal loan journey    

 Banks Offering Personal Loan Balance Transfer, January 2020

LendersInterest Rates(in per annum)Loan AmountTenureProcessing Fee
SBI11.45%-14.90%Up to 20 lakhUp to 5 Years1% of the loan amount
ICICI Bank11.25%-22%Rs:50,000-20 lakhUp to 5 YearsUpto 2.25% of loan amount +GST
HDFC Bank10.75%-21.30%There’s no maximum limit. Your income,
credit score and repayment
capacity will dictate the loan amount
Up to 5 YearsUp to 2.50% of the loan amount
Bajaj Finserv12.99% onwardsUp to 25 lakhUp to 5 YearsUp to 4.13% of the loan amount+GST
Kotak Mahindra BankStarting 10.99%Rs.50,000-15 lakhUp to 5 YearsUpto 2.5% of the loan amount + GST 
Axis Bank12%-24%Rs.50,000-15 lakhUp to 5 Years1.50%-2.00% of the loan amount plus applicable GST
Punjab National Bank9.95% – 14.50%Up to 4 lakhUp to 5 Years1.80% of the loan amount plus applicable GST
Punjab & Sind Bank12.45%-12.70%Up to 3 lakhUp to 5 Years1% of the loan amount
Yes BankStarting 10.99%Rs.1lakh-Rs.40 lakhUp to 5 YearsUpto 2.50% of the loan amount +GST
HSBC Bank10.50%-17.84%Up to Rs.15 lakhUp to 5 YearsUp to 1% of the loan amount
Citi BankAs applicable at the time of signing the loan agreementRs.50,000- Rs.30 lakhUp to 5 YearsUp to 3% of the loan amount
IDFC First BankAs applicable at the time of signing the loan agreementBased on borrower’s eligibilityUp to 5 Years Up to 3.5% of the loan amount
Induslnd Bank11.25%onwardsRs.50,000-Rs.15 lakhUp to 5 YearsUp to 2.50% of loan amount+GST
Aditya BirlaStarting at 14%Rs.50,000-Rs.50 lakhUp to 5 Years2% of the loan amount
Fullerton India12.99%-36%Up to Rs.25 lakhUp to 5 YearsUp to 3% of the loan amount

Calculation for Personal Loan Balance Transfer EMI Repayments

Let’s just understand how a personal loan balance transfer can help you save on EMIs. 

Example: If you have borrowed a loan of Rs. 6,00,000 at the rate of 16.5% for 5 years. You paid EMIs (inclusive of interest) in that bank for 2 years. After that, you found a bank offering you the balance transfer option of the remaining outstanding amount at an interest rate of 12.49%, check out what would be your EMI and savings? 

Below is the table showing EMI, Total Interest, Total Amount and monthly saving on personal loan transfer:

LendersInterest RateLoan AmountTenureMonthly EMI(in Rs)Total Interest Amount(in Rs)Total Amount (Principal+Interest)(in Rs)Yearly EMIs(in Rs) Yearly EMIs Savings(in Rs)
Existing 16.50%6,00,000514,751
2,85,0438,85,043(14,751×12)=1,77,012
(1,77,012-1,67,232)=9,780
After repaying the loan for 2 Years, Outstanding Loan Balance=Rs.4,16,635                                      
New12.49%4,16,635313,93685,0595,01,694(13,936×12)=1,67232

However, the savings vary from case to case. The more difference in interest rates you have and the higher loan amount you have, the maximum savings you can expect.   

Features & Benefits You Can Get Personal Loan Balance Transfer 

1.Lower Interest Rates: If your existing personal loan is at a higher interest rate, it would be advisable to opt for a balance transfer. Yes, a Personal loan balance transfer allows a borrower to enjoy attractive interest rates. The lower rates you have, the better it is for you in the long run. Yes, with the help of the same, you can have less burden on your pocket as a monthly amount of instalments will also be reduced. Thus, a hassle-free loan journey. 

2.Pocket-friendly EMIs: With lower rates come lower EMIs. Yes, with the help of a personal loan balance transfer, you can have lower interest rates offered by a new lender.And, as a result of which, less burden will be on your pocket. If the interest rates get reduced, the equated monthly instalments will also be reduced, thus less burden.  

3.Higher Loan Amount: Why borrowers also choose balance transfer is because it comes with a higher loan amount feature. Yes, if your existing loan amount is less or not enough to meet your needs, switch to a new lender with a balance transfer and get a higher loan amount. Also, the bigger the loan amount is, the better opportunity for a borrower to show his long repayment history. Follow the rule of timely repayment here and let your credit/cibil score be improved, making you an ideal borrower for future borrowings.      

4.Top-up: Another prominent feature that makes personal loan balance transfer a reliable option is loan top-up. Yes, with the help of a personal loan top-up, a borrower can get the additional money(certain loan amount) on a borrowed loan amount. This top-up facility allows a borrower to have extra funds to meet his needs. However, top-up loans are either given for the outstanding period of the existing personal loan or a certain period. The tenure changes from bank to bank.  

5.Longer Loan Tenure: With a personal loan balance transfer, a borrower can get the longer tenures. Transfer your loan to a new lender, offering flexible or rather longer repayment tenure options to reduce your loan burden. Yes, the longer tenure you have, the better it is for your pocket as your EMIs will be reduced. Not only this, but the longer tenure also helps you to show the credit/repayment history, hence also boosts your cibil score. 

6.Improved Credit Score: On transferring your existing loan to a new lender, you would be able to have a good credit/cibil score. With longer tenure, your repayment history increases and with paying your EMIs on time, you can have a good credit score. In case of availing a personal loan, a score of above 700 out of 900 is considered to be good enough in grabbing the best deal. So, try to maintain your cibil score before or after the personal loan balance transfer.  

7.Better Customer Services & Perks: If you are not happy with your existing lender in terms of customer services and other privileges, opting for a balance transfer is a wise move here. Talking about perks, waiver of last EMI, zero/minimal processing fees & other charges should be taken into consideration. Make sure your new lender offers many such extra privileges to make your personal loan journey easy.  

Eligibility for Personal Loan Balance Transfer

Take a look at the eligibility criteria for salaried and self-employed individuals in the table below. 

Eligibility CriteriaSalariedSelf-employed
Minimum Age2124
Maximum Age5865
Minimum IncomeRs.20,000 monthly (non-metro cities), Rs.35,000 monthly (metro cities)Rs.2 lakh(annual)
Credit/Cibil ScoreAbove 700(out of 900)Above 700(out of 900)
Minimum Job/Business Stability1-2 Years2-3 Years
Minimum Work/Business Experience1-2 Years3 Years
Minimum Profit After TaxNARs.1-2 lakh(annual)

Documents Required for Personal Loan Balance Transfer

Make sure your documents are complete for a successful personal loan balance transfer process. 

Salaried: 

  • Duly signed application form for personal loan balance transfer along with passport size photograph
  • Identity Proof (PAN card/driving license/passport/voter ID/Aadhaar Card etc)
  • Age Proof (PAN card/driving license/passport/voter ID/Aadhaar Card etc)
  • PAN Card copy (Mandatory)
  • Address Proof (Aadhaar Card/Passport/ Landline Bill/ Latest Electricity bill/Rent agreement etc)
  • Last 6-month bank statement
  • Salary slip for the last 3 months
  • Statement of personal loan from a current lender (a loan that needs to be transferred)

Self-employed:

  • Duly signed application form to do loan balance transfer along with passport size photograph
  • Identity Proof (PAN card/driving license/passport/voter ID/Aadhaar Card etc)
  • Age Proof (PAN card/driving license/passport/voter ID/Aadhaar Card etc)
  • Address Proof (Aadhaar Card/Passport/ Landline Bill/ Latest Electricity bill/Rent agreement etc)
  • TAN Card
  • Last 3 years Balance sheet along with profit and loss statement pertaining to business
  • Last 6-month bank statement of individual and business entity
  • Statement of personal loan from a current lender (details of the loan that need to be transferred)

Personal Loan Balance Transfer Charges

Once you opt for a balance transfer, there are a lot of charges that one needs to bear. 

Prepayment/Foreclosure Charges: As you are opting for a balance transfer, which means you need to pre-close your existing loan before its due tenure. Thus, a borrower needs to pay a prepayment fee to the existing lender that goes up to 5% of the Principal Outstanding+GST 

Processing Fee:On transferring your existing personal loan to a new lender, a borrower needs to pay a one-time processing fee. In case of a balance transfer, this fee is levied on the outstanding balance (remaining loan amount) and ranges between 1.50%-2.50%+GST. 

Things to Keep in Mind While Opting for Balance Transfer

1.Compare & Evaluate Lenders for:

  • Lower Interest Rates
  • Affordable EMIs
  • Maximum Loan Amount
  • Additional Amount(Top up)
  • Less Documentation
  • Minimal Processing Fee
  • Better Services & Perks

2. Read Loan Agreement & Fine Prints Carefully with New Lender

3. Do Not Forget the NOC from Existing Lender

4.Pre-closure Terms and Conditions with Existing Lender

5. Avoid Signature Mismatch

6. Do Not Give False Information/Details

7.Avoid Taking Balance Transfer, If You See a Marginal Difference in Interest Rates & EMIs. 

Hope, now you have a complete insight on personal loan balance transfer, hence will make a wise move.

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