Personal Loan Balance Transfer - Everything You should Know

If a high-interest rate on a personal loan is bothering you, then it’s time you think of opting for the loan balance transfer. Read to know everything about personal loan balance transfer in detail.

We all require a loan to meet our short-term or long-term goals. Many people opt for a personal loan as it is a multipurpose credit. You can easily apply for it at any bank without disclosing the reason. Use it for vacation, marriage, high-end gadgets, your child’s education, buying a car, or any other purpose. Personal loans are also useful when you have an emergency and don’t have much money to rely on. It is easy to avail of the loan with minimum documents. Often, while applying for the unsecured loan, the first and foremost thing you check is the interest rate. In an emergency, some tend to overlook the interest factor and end up paying higher interest rates that don’t align with the current market rates. A high loan rate means paying higher EMIs, thus putting a financial burden on your hard-earned money.

In such a scenario, it is advisable to opt for Personal Loan Balance Transfer, which allows you to transfer the outstanding principal amount from your existing bank to another bank that offers low-interest rates.

Features of Personal Loan Balance Transfer:

1. Better Interest Rates: Once you apply for a balance transfer with the new lender that offers lower interest rate compared to your existing lender, it will reduce your EMI burden. Also, bring down your loan liability.
2. Loan Tenure: Along with the interest rate factor, the new lender also ensures that you get an extended loan tenure. Enhanced loan tenure shrinks your EMI amount, thus helping you repay the loan faster.
3. Other Benefits: While choosing to refinance your personal loan, you can avail top-up loan facility to fund your requirements. The terms and conditions of the new lender are new, so you may get other benefits in the process.
4. Minimal Documentation: Personal Loan Transfer has a simple documentation process with no security or guarantor required.

Let’s understand the balance transfer with the help of an example:

If you have an ongoing personal loan of Rs. 3 lakh at the rate of 18% p.a. for a tenure of 36 months, and your EMI is Rs.10,845. When you do a balance transfer where the rate of interest is 11.29% on the principal amount of Rs.2.17 lakhs, your EMI gets reduced to Rs.10,115. This way, you can save around RS. 16,560.

Anyone can apply for a balance transfer of personal loan if the individual struggles with higher EMIs due to high-interest rates. Refinancing your loan to the new lender can provide you better benefits and reduce interest, consequently helping you save on interest payments.

If you’re planning for refinancing, make sure you think about the following things: the interest rate of various lenders, use personal loan balance transfer calculator to know if it is really helpful, check for balance costs of the new lender, read all the terms and conditions of the transfer process. Once you take the call, visit the official website of ICICI Bank, where you can easily apply for balance transfer online with interest rates starting at 11.29% p.a.