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Transfer your Personal loan at attractive interest rates with top banks
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Personal loan balance transfer (PLBT) is the process of transferring your personal loan from your present lender to a new lender. If you have an outstanding loan with a high interest rate, you can transfer it to another lender and enjoy a lower rate of interest. This transfer of balance allows you to lower the burden of your monthly obligations.
Before choosing the balance transfer facility, it is crucial you compare the interest rates offered by leading banks and financial institutions of the country. Find more details in the table below:
Name |
Interest rate (per annum) |
|---|---|
State Bank of India |
8.85% |
10.50% |
|
10.50% |
|
Axis Bank |
10.49% |
10.99% |
|
IndusInd Bank |
11.0% |
Punjab National Bank |
8.90% |
10.49% |
Note that the interest rate mentioned in the above table is indicative and can change as per the bank’s discretion.
Interest rate is a major factor that affects the overall affordability of your loan. Besides, there are a few associated charges that can significantly affect your loan cost. Find details about them in the table below:
Fees and charges |
Rate |
|---|---|
Processing fees |
1% - 2% of the loan amount |
Foreclosure and prepayment charges |
Around 5% of the outstanding balance |
Note that the charges mentioned in the table are not absolute and may change as per the lender. Additionally, some lenders do not levy any charges on loan foreclosure or prepayment.
Lower interest rates reduce the borrower's interest burden.
It is always better to assess the need, evaluate the offer, and compare the interest rates and other features before making a Personal Loan balance transfer.
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When you transfer a personal loan, you can potentially negotiate the tenure and get it extended as per your requirements.
With an extended loan tenure, you can have a lower monthly burden of EMIs but a higher total interest payout.
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Many lenders offer a top-up loan facility with personal loan balance transfer.
In the case of top-up loans, the outstanding loan balance is directly paid to your previous lender and the fresh loan amount is credited to your account.
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Depending on your credit history, you may get an offer from other lenders offering better features on personal loans such as waiver of last EMI, zero processing fees, lower interest rates, etc.
The personal loan balance transfer facility can, thus, not only reduce your personal loan interest burden, but you might also get a loan with better features.
Read MoreYou can easily transfer your personal loan from one lender to another by following the steps mentioned below:
Step 1: Check the interest rate, processing fee, and the loan tenure that the new lender is offering. It is a good idea to check for a balance transfer offer with multiple lenders and then shortlist one best suited for you.
Step 2: Compare the new loan offer with your existing loan and calculate the savings. Make sure that you also consider other charges such as foreclosure charges (to be paid to your present lender) and the processing fee of the new loan.
Step 3: Once you have decided to transfer your loan to a new lender, apply for foreclosure with your present lender and obtain an NOC (No-Objection Certificate) for the same.
Once the balance transfer process is complete, your old lender will receive the outstanding amount from the new lender. Post this, you owe the outstanding amount to the new lender.
The following are the key eligibility criteria for a Personal Loan balance transfer:
The outstanding loan amount has to be at least ₹50,000
You need to provide a record of your personal loan EMI payment. Ensure all of them are cleared or at least the previous twelve instalment payouts of the existing loan will be checked
If you have numerous loans/credit cards, you need to ensure all are in good standing as per the requirements
You need to submit the following documents while applying for a personal loan balance transfer:
Application Form |
A duly signed Personal Loan Balance Transfer application form |
Identity Proof |
PAN card/driving licence/passport/voter’s ID/Aadhaar card, etc. |
Address Proof |
Aadhaar card, passport, landline bill, electricity bill, rent agreement, etc. |
Age Proof |
PAN card/driving licence/passport/voter’s ID/Aadhaar card, etc. |
Income Proof (for salaried employees) |
Bank account statements for the last 6 months Salary slips for the last 3 months |
Income Proof (for self-employed individuals) |
The balance sheet of the last 3 years along with the profit and loss statement of the business Bank statements of the last 6 months of individual and business |
Let us assume that you have taken a personal loan of ₹5 Lakhs from a bank/NBFC at an interest rate of 15% p.a. for a tenure of 5 years. Now, after having paid 12 EMIs, you wish to transfer this loan to a new lender who is charging an interest rate of just 11.50% p.a. In this case, you will be saving ₹35,710 on the total interest amount. The following table gives you an illustration of the EMI payable to the new lender and your net savings:
Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.
Anyone who has availed a personal loan from a financial institution can get their loan transferred to another bank/NBFC if they feel they are getting a better offer.
A personal loan balance transfer is an ideal solution to settle your debts at a lower interest rate. A personal loan is transferred to save on the interest amount and reduce EMIs by switching to another personal loan with a lower interest rate. Moreover, you can also avail an additional top-up from the new lender.
If you opt for a balance transfer on your personal loan, the repayment tenure usually ranges from 1 year to 8 years.
While the cost involved varies from lender to lender, generally, two types of charges are to be paid on personal loan balance transfer:
Foreclosure Charge: It can be anywhere between 2% to 5% of the outstanding amount depending upon the lender. This foreclosure charge needs to be paid to your existing lender.
Processing Fees: This fee needs to be paid to the new lender, where you want to transfer the loan. It usually ranges from ₹999 to up to 2% of the loan amount.
Yes, you may choose to transfer your personal loan to a lower interest rate by searching for a lender that offers financing at low interest rates.
Personal loan balance transfer does not directly affect your credit score. However, if your loan EMIs are reduced, it would be easier for you to ensure timely repayment, which will improve your credit score in the long run.
No, since a personal loan is an unsecured loan, you need not submit any collateral while applying for a personal loan balance transfer.
It is good to transfer personal loan to another bank if the current interest rate you are paying is too high. However, consider choosing the right time to opt for this facility, as it can impact your interest rate.
