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Personal Loan Balance Transfer

Personal Loan Balance Transfer

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.

Key Features of Personal Loan Balance Transfer

There are many positive grounds where you might prefer to opt for a Personal Loan Balance Transfer. They are –

  • Reduced interest rates- The biggest advantage of balance transfer is that it provides you the benefit of lower interest rates. The new bank would offer you a low interest rate than the original bank, thereby decreasing your EMI amount and total interest liability.
  • Longer tenure- While switching to a new bank, you can re-negotiate the loan terms and ask them to extend the repayment tenure. Here you can lower your monthly EMI and extend your loan repayment tenure.
  • Improved Credit Score- It might happen that you have regularly paid your past EMIs completely and on time, but an unforeseen circumstance arises where it will be difficult for you to

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.

  • Top-up Loan – Personal Loan Balance Transfer also gives you the flexibility to borrow additional money. If you have an existing loan with your current bank and want an additional loan, you can approach a separate bank who would be willing to offer you the loan at a cheaper rate provided you agree to transfer the outstanding loan balance amount of your current loan to the new bank.

Documents Required for Personal Loan Balance Transfer

  1. For the KYC- Pan /Aadhar CARD
  2. For Address proof- Utility Bill (not older than 3 months old) / Passport or Leave and License Agreement (any one).
  3. For Identity proof (any one): PAN Card, Driving license, Voter’s ID card, employee identity card.
  4. For Income proof: financial statements for previous years audited and signed.
  5. Bank statement of last 6 months
  6. Passport-size photos

Personal Loan Balance Transfer Calculator

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.


Credit Score    Home Loan    Loan Against Property    balance-transfer    Business Loan    Personal Loan



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