Balance Transfer
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How It Works
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Personal Loan Balance Transfer
Personal Loan Balance transfer was first started as a process of transferring your outstanding balance from one credit provider to another. However, this process was restricted to credit cards at first. The idea behind this was to transfer your balance from a high interest credit card to a credit card with a much lower interest rate (also to avoid late fees).
Now, the process has been extended to other forms of credit such as personal loans, home loan etc. It is a process where the entire unpaid principal loan amount is transferred to another bank or NBFC which is offering a lower interest rate. In simple terms, now you just have to pay your EMIs to the bank you’ve transferred your loan to, at the new and lower interest rate.
Key Features of Personal Loan Balance Transfer
There are many reasons why you should opt for a Personal Loan Balance Transfer including:
- Reduced interest rates : A balance transfer provides you the benefit of lower interest rates. The new bank will generally offer you a low interest rate than the original bank, thus 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. Doing this will lower your monthly EMI which you will pay over a longer period of time.
- Improved Credit Score : If you have regularly paid your past EMIs completely and on time, but foresee that it will be difficult for you to make complete payments for the next few months because of some unexpected financial constraints, it is wise for you to consider transferring your loan. This will increase your credit repayment cycle and also help in maintaining a high credit score.
- Top-up Loan Personal Loan Balance Transfer gives you the flexibility to borrow more money. If you have an existing loan with a certain bank and are in need of an additional loan, you can approach a separate bank who would willing to offer a loan at a better rate if you agree to transfer the outstanding balance of your current loan.
Bank Policy Details
| # | Financial Institutions | Rate of Interest | Processing Fee | Loan Amount | Fore Closure Conditions and Charges | Part Payment Option | Disbursal TAT | Minimum Monthy Income |
|---|---|---|---|---|---|---|---|---|
| 1 | HDFC | 10.25%-12.25% | Rs 4719 | Min. 50,000 Max. as per eligibility | Yes | 3 - 4 Working Days | Rs 25000 | 1-6 Years |
| 2 | Bajaj Finance | 13.00% - 15% | Upto 1.50% | Upto Rs.35 Lacs | Yes | 24 Hrs | Rs 40000 for Metro and Rs 25000 for Non Metro | 1-7 Years |
| 3 | IDFC | 10.75% - 13.45% | upto 3999 + GST | Min. 50,000 Max. as per eligibility | No | 1 - 2 Working Days | Rs 20000 | 1-5 Years |
| 4 | ICICI | 10.50% - 17.50% | Rs.4999 for Special offers otherwise 1% - 1.5% | Min. 50,000 Max. as per eligibility | No | 3 - 4 Working days | Rs 25000 | 1-6 Years |
| 5 | Standard Chartered | 11.00% - 12.50% | 1% | Rs.1,00,000 - Rs.50,00,000 | No | 1 - 2 Working Days | Rs 25000 | 1-5 Years |
| 6 | Kotak Mahindra | 10.50% - 16.99% | 0.99% - 2.0% of Loan Amount | Rs.100,000 - Rs.20,00,000 | Yes | 3 - 4 Working days | Rs 25000 | 1-5 Years |
| 7 | Tata Capital | 11.99% - 17% | 1.50%-2.00% | Rs.75,000 - Rs.15 Lacs | Yes | 1 - 2 Working Days | Rs 25000 | 1-6 Years |
| 8 | Fullerton India | 11.99% - 26% | 1.00%-2.00% | Rs.50,000 - Rs.15,00,000 | No | 4 - 5 Working Days | Rs 20000 | 1-5 Years |
| 9 | IndusInd Bank | 12.99% - 20% | 0.5% -2% | Rs.1,00,000 - Rs.25,00,000 | No | 4 working days | Rs 25000 | 1-5 Years |
| 10 | Yes Bank | 10.75% - 16.99% | 1-2% | Rs.100,000 - Rs.40,00,000 | Yes | 3 - 4 Working days | Rs 25000 | 1-6 Years |
| 11 | Axis Bank | 10.75% - 16.99% | 1.00%-2.00% | Rs.100,000 - Rs.30,00,000 | Yes | 48 Working days | Rs 20000 | 1-5 Years |
| 12 | Additional Security Deposit | 99 | 99 | 99 | 99 | 9 | 9 | 99 |
Documents Required for Personal Loan Balance Transfer
The common documents required for an online personal loan balance transfer approval are given below:
- KYC-Pan
- Address proof: Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
- Identity proof (any one): PAN Card, Driving license, Voter’s ID card, employee identity card.
- Residence proof – Passport driving licence, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas)
- Income proof: audited financials for the last two years
- Bank statement
- Repayment Schedule of the Loan to be Transferred
- Passport-size photograph
Frequently Ask Questions
A Balance Transfer lets you transfer an existing loan to a new lender at a better rate of interest.
You should consider a personal loan balance transfer when
- The interest rate of your loan is higher than current market rates
- Your loan has a floating rate of interest and you want to reduce risk by opting for a fixed rate of interest
- You want to lower your EMIs