If you are having trouble paying the EMI of your personal loan (personal loan), then transferring balance of personal loan can be a great option for you. Personal loan balance transfer can help in reducing your financial burden and you can also get the facility to pay the loan at a lower interest rate. Transferring the balance of a personal loan is beneficial in many ways and it also helps in managing your finances, but before transferring the balance of a personal loan, several factors must be kept in mind. Through this article, we are going to give you information about these factors.
What is meant by balance transfer?
Balance transfer is a facility offered by banks to customers. Using this facility, borrowers can choose to transfer their dues to another bank and avail a better interest rate. People usually opt for balance transfer to get better terms or consolidate debt on their existing loan. Personal loan balance transfer works just like a credit card balance transfer. By doing this you can take advantage of better interest rate. Your new lender may consider you eligible for a top-up loan or a higher loan amount. You can opt for personal loan balance transfer with any lender. However, personal loan balance transfer depends on the bank’s guidelines, availability and the credit profile of the borrower.
When should you choose balance transfer option?
Personal loan balance transfer means that you can take advantage of better terms on your existing loan and at the same time reduce your financial burden. Lenders sometimes consider borrowers eligible to lend a higher amount based on their credit rating. You can opt for personal loan balance transfer on the following basis.
Additional amount – Some lenders allow borrowers to avail top-up loans on their existing personal loans. If the new lender offers you a low rate of interest with the top-up loan facility, then you can opt for balance transfer. You can meet your immediate financial needs by taking a top-up loan.
Better Services – Customers are sometimes dissatisfied with the services provided by their lenders and want to go to banks that provide them better services. If this is the case with you, then you do not need to wait much longer to get rid of your lender. You can opt for personal loan balance transfer and close your loan with your existing lender and get better services from any other lender.
Better terms on loan Most people opt for balance transfer to take advantage of better terms such as lower interest rate on loan, longer repayment period. Sometimes when people borrow money, they take a loan at a higher interest rate due to their salary or their credit record and become eligible to transfer the loan if the credit rating or income increases and loan transfer Let’s get it done. With this, they can take advantage of better terms and interest at a lower rate.
Is it good?
If you are paying interest at a higher rate or are dissatisfied with the services of your current lender, there is no harm in transferring a personal loan balance. But keep in mind that transferring your existing loan to another bank is similar to taking a new loan. Therefore, before signing any document to transfer the balance, take a good knowledge of the terms, services and benefits and select the one which gives the facility of interest at a lower rate. It is correct to take information about the balance transfer process and how much you will be charged, etc. Evaluate the current loan with the total cost of the new loan.
If you feel that even after paying the total charge on the balance transfer, your financial burden is less than the cost of the current loan, you should opt for it. But if you have to pay more even after the balance transfer, there is no use of transferring the balance. Sometimes people also opt for balance transfer to extend their repayment period. However, it can also help in reducing the burden of EMI. Choosing or not to choose a balance transfer depends on your financial situation.
Most banks offer introductory offers such as a welcome bonus or discount card to entice customers. Instead of being attracted by such proposals, comparisons should be made on the basis of interest rate, additional charges, bank conditions, etc.
