Personal Loan 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 changing to a new low rate personal loan where you can avail additional top up loan from the new bank. Thus the prime motive for a personal loan balance transfer is to reduce the overall burden of present debt. It is a process of transferring your outstanding balance from one credit provider to another. Though this process was restricted to credit cards in the beginning, the process has now been extended to other forms of credit such as personal loans, home loan etc.
In this process of transferring your personal loan, the entire unpaid principal loan amount is transferred to another bank or NBFC which is offers a lower interest rate. Once the loan has been transferred, you have to now pay your EMIs to the new bank you’ve transferred your loan to, at the new and lower interest rate.
There are many positive grounds where you might prefer to opt for a Personal Loan Balance Transfer. They are –
make complete payments for the next few months, in such circumstances it would be wise for you to consider transferring your loan. This will help sustain and even increase your credit repayment cycle and also help in maintaining a high credit score.
Before going in for the Personal loan balance transfer to a new Bank of NBFC, it is strongly advised to calculate your interest savings by using the Personal Loan Balance Transfer Calculator available in all the sites of the banks. Only then should you transfer your loan a to another bank or NBFCs.