Personal Loan Transfer
What is a Balance Transfer?
A balance transfer is the process of transferring outstanding balance of a loan from one bank to another. A loan is transferred to save interest and reduce EMIs by switching to a low rate personal loan as well as to avail additional top up loan from the new bank.
Balance Transfer Personal Loan
Balance Transfer of personal loan entails multiple benefits to the borrowers, which include
- You get lowest interest on personal loan balance transfer starting @ 11.25%
- You can reduce your EMI outgo by 5 – 8% by transferring personal loan
- You can also avail top up loan to pay down high cost credit card dues or meet any other personal expenses such as travel, vacation, medical, marriage or even purchasing a car
- You can get quick personal loans of up to 5 years with minimal documentation and without any guarantor
Savings on balance transfer
Suppose, you have an existing personal loan outstanding amount of Rs. 2 Lakh for a tenure of 48 months. You can transfer your existing personal loan to a new bank at lowest rates. By transferring a 4 year personal loan of Rs. 2 lakh from 14.5% to 11.25%, your EMI can reduce from Rs. 5,516 to Rs. 5,193. Total savings on interest after balance transfer is Rs. 15,464.
Illustration of Interest Savings with Balance Transfer
||Rs. 2 Lakhs
||Rs. 2 Lakhs
|Rate of Interest (ROI)
|Loan Tenure Remaining (months)
|Monthly Reduction in EMI
What are the eligibility criteria for personal loan transfer to new lender?
- Applicant must have a running personal loan from another bank
- Loan amount being transferred should be at least Rs. 50,000
- Clean EMI payment track record of at least 12 months
- CIBIL Score required as per bank policy, typically 700 and above
Personal Loan Balance Transfer Process
Follow the below simple steps on how to transfer your personal loan from bank to another
- Check the current rate on personal loan that you can get and calculate interest savings
- Calculate the estimated cost of loan transfer on account of various fees and charges.
- In case you decided to transfer , Apply for a NOC and foreclosure letter from your existing bank
- Apply for loan at new bank, submit your loan documents with complete repayment record
- Obtain sanction letter and execute new loan agreement with the new bank
- Take disbursement from new bank by way of cheque/ demand draft in favor of existing bank
- On receipt of loan outstanding, your existing bank will cancel all the cheques and ECS and close your loan account
Personal Loan Transfer Charges
Charges to transfer your personal loan can be different depending on your existing bank and the new bank. Key charges for loan transfer include foreclosure charges to be paid to your existing bank and processing fees.
- Foreclosure charges are payable to existing bank for take over of personal loans.
- Processing fees are payable to the new bank on transfer and may range from a flat fee Rs. 999 to up to 2% of the loan amount.