Avail personal loan at attractive interest rates starting from 10.5% *p.a.
Avail personal loan at attractive interest rates starting from 10.5% *p.a.

Finance Planning

A balance transfer is when you move your existing credit card balance(s) to another credit card with a different provider. This can help you keep all of your borrowing in one place. You could receive an introductory or promotional rate for a set period of time.

  • Credit card balance transfers are typically used by consumers who want to save money by moving high-interest credit card debt to another credit card with a lower interest rate
  • Balance transfer credit card offers typically come with an interest-free introductory period of six to 18 months, though some are longer.
  • Many credit transfers involve transfer fees and other conditions
  • Any violation of the cardholder agreement can potentially nullify the introductory APR and trigger penalty rates to be applied.
balance-transfer

Personal Loan Balance Transfer:

Personal Loan Balance Transfer (PLBT) facility offered by lenders to existing personal loan borrowers of other bank and NBFCs to transfer their existing personal loan at lower interest rates.


Balance Transfer Processing Fees and Charges:

You are existing lender may charge foreclosure fee of up to 5% on the outstanding loan amount on transferring the personal loan to another, if the original personal loan was availed on fixed interest rates. Lenders would not charge any foreclosure fee in case of personal loans sanctioned on floating interest rates. The new lender will charge a processing fee from Rs. 500 to 4% of the outstanding loan amount during personal loan balance transfer.


Benefits and Features of Personal Loan Balance Transfer:

  • Lower Rate of Interest: One of the primary objectives of exercising personal loan balance transfer is to avail lower interest rate and thereby, reduce one’s overall interest cost.
  • Longer Repayment Tenure: Exercising personal loan balance transfer facility can also help a borrower to opt for a longer tenure than the residual loan tenure of his existing personal loan. A longer tenure will reduce then his monthly EMI burden. However, this would lead to a higher interest cost for the borrower.
  • Avail Top-up Personal loan: Many lenders offer top-up personal loans to those transferring their existing personal loans. Thus, personal loan balance transfer facility would benefit existing personal loan borrowers unable to avail top-up personal loans or being charged higher interest rates for it.

Eligibility for Personal Loan Balance Transfer:

Below stated is the basic eligibility criteria for PLBT:

  • Age: Minimum 21 years and maximum 65 years
  • Salaried Individuals and self-employed professionals
  • Existing outstanding loan amount should be at least Rs. 50,000 or defined by the lender
  • Clean repayment history
  • Minimum 2 years of work experience with at least 1 year with current employer
  • Minimum Monthly Income: Rs. 15,000
  • CIBIL score: Usually 750 or above

Documents Required:

Basic documents that the borrower may be required to submit in case he/she wishes to opt for a personal loan balance transfer are as follows:

  • Duly signed application form with passport size photographs
  • Identity Proof (PAN card/driving license/passport/voter ID/Aadhar Card, etc.)
  • Age Proof (PAN card/driving license/passport/voter ID/Aadhar Card, etc.)
  • PAN Card copy (Mandatory)
  • Address Proof (Aadhar Card/Passport/ Landline Bill/ Latest Electricity bill/Rent agreement, etc.)

Additional documents specified to salaried and self-employed individuals are as follows:


For Salaried Individuals:

  • Last 6 months’ bank statement
  • Salary slip for last 3 months
  • Statement of personal loan from a current lender (for the loan that needs to be transferred)

For Self Employed Individuals:

  • Business PAN card
  • Business address and vintage proofs
  • Last 3 years’ Balance sheet along with profit and loss statement pertaining to business
  • Last 6 months’ bank statement of individual and business entity
  • Statement of personal loan from a current lender (details of the loan that need to be transferred)

Process of Personal Loan Balance Transfer:

Personal loan balance transfer process usually involves the following steps:

  • Check the current interest rate that you can get on your personal loan with other lenders and calculate the interest savings.
  • Evaluate the estimated cost of the loan transfer taking into account various charges and fees that might be applicable.
  • Consider the net benefits and finalize whether you want to opt for the balance transfer or not. Shortlist a few lenders that you may want to transfer your existing loan to.
  • Compare the interest rates offered by the shortlisted lenders, your loan amount eligibility and their loan process.
  • After you finalize upon the new lender and decide to go ahead with the transfer, apply for a NOC (No Objection Certificate) and foreclosure letter from your existing lender.
  • Start the application process with the new lender. Submit the loan documents along with the complete record of repayments.
  • Get a sanction letter and execute the new loan agreement with the new lender.
  • Take a disbursement (of the outstanding loan amount that you had to pay to the previous lender) from the new lender through cheque/ demand draft in favour of the earlier lender.
  • Once the previous lender receives the outstanding loan amount, they will cancel all the cheques and ECS and close your personal loan account.

Home Loan Balance Transfer:

Home Loan Balance Transfer allows existing home loan borrowers to transfer the outstanding loan amount of their existing home loan to a new lender at lower interest rate and/or for longer tenures. The lower interest rate availed through home loan balance transfer facility helps such borrowers to reduce their overall interest cost. This facility is especially beneficial for those who took housing loans at higher interest rates and now are eligible for much lower rates due to improved credit profile.


Why Should You Apply for Home Loan Balance Transfer?

  • Lower Interest Rate: Many existing home loan borrowers might have availed home loans at higher interest rates due to their lower loan eligibility and poorer credit profile. But improvements in their credit profiles over the years can make them eligible for availing home loan at low interest rates.
  • Maximum Tenure: Many lenders allow balance transfer customers to opt for loan tenures longer than the residual tenure of their original home loan. Opting for extended loan tenure would result in lower EMIs and thereby, reduce their EMI burden. However, opting for this option would increase their overall interest costs.
  • Top-up Loan: Home loan borrowers opting for balance transfer also get a provision of top-up loan along with home loan balance transfer. The top up loan amount can be used for meeting any personal, professional and requirements without any end-usage restriction. The top up loan amount may vary from one lender to another depending on the overall loan amount eligibility of the balance transfer applicant. Thus, existing home loan borrowers unable to avail top-up home loans from their existing lenders or are being charged higher interest rates for it can opt for home loan balance transfer.
  • Additional Benefits: Depending on your new lender, you may get to enjoy better loan features such as EMI waivers, zero processing fees, etc.

Eligibility Criteria for Home Loan Balance Transfer:

  • Your property must be ready to occupy or already occupied
  • You must complete at least 12 home loan EMIs with the current lender
  • There should not be any outstanding dues on your existing loan

Documents Required for Home Loan Balance Transfer:

  • KYC Documents: PAN card, Aadhaar Card and Proof of Residence
  • Proof of Income: Salary Slips and Form 16 (for salaried), last 3 years’ ITR along with financials (for salaried, self-employed and professionals) and last 6 months’ bank statements
  • Additional Documents: Latest principal outstanding letter, list of documents from existing financier and repayment track record

Home Loan Balance Transfer Process:

Home loan balance transfer process usually involves the following steps:

  • Step 1: Shop around for balance transfer offers with other lenders and compare their interest rates along with their features, benefits, processing fees and other charges.
  • Step 2: Weigh the cost-to-benefit of the balance transfer taking into account all costs associated with the transfer. Also, before going ahead, ensure that the benefits outweigh the costs.
  • Step 3: Once you get a better deal, negotiate the terms with your current lender to see if they can offer you the same or better loan terms.
  • Step 4: Once you decide to go ahead with the transfer, get an NOC (No Objection Certificate), foreclosure letter, loan repayment record and property documents from your existing lender.
  • Step 5: Start the home loan application process with the new lender by submitting the application form and all other required documents.
  • Step 6: Get a sanction letter and sign the loan agreement with the new lender.
  • Step 7: Now your new lender will pay off your outstanding home loan amount (that you had to pay to the previous lender) by transferring the amount to your previous lender through cheque/ demand draft.
  • Step 8: Once the previous lender receives the outstanding loan amount, they will cancel all the cheques and ECS and close your home loan account.