Everyone in this world looks for chances on how to reduce their expenses. Then why not on the loan amount that fulfils your financial crises. Have you ever taken a loan from one bank and then found that the services are not to your reach? If yes, then have you considered transferring the loan to other banks which will lower the cost of your loan. This transferring of personal loan will improve your credit score and gives you better loan services.
A personal loan balance transfer is about getting a loan from one bank, paying few EMIs and get to know that another bank is offering better services and transferring the rest unpaid loan amount to another bank which is offering better services and lower interest rates. There will be not much change in the process of loan repayment, you just have to pay lesser interest rates and can change your loan tenure period.
Remember a few things before opting for a personal loan balance transfer.
Cash Outflow: Before you transfer your loan, you should calculate the amount of money that you are paying to the new bank. As you are getting lower interest rates, your tenure period also increases, which ultimately means you will pay the money for a longer time. So, you have to calculate the total cash outflow and make sure it is not more than the amount that you are required to pay.
Fee: At the time of taking the loan, you must have already paid the processing fee to the lender. After transferring your loan, then you should again pay the processing fee. So, calculate the total fee to be paid and check if its worth to transfer the loan. Only if the transfer is beneficial, then opt for a personal loan balance transfer.
Terms and conditions: Read carefully and understand the terms and conditions of the new lender and clear the doubts beforehand. Know the hidden costs, interest rate, other charges, etc.
Now that you know what a personal loan balance transfer is, let’s know why we should opt for this and in what way will that benefit us.
Why opt for a personal loan balance transfer and its benefits?
- Better features: When you are looking for a balance transfer option, other lenders will make sure to offer better services like lower interest rates, zero processing fees, waiving off last EMI, etc. You will get benefitted from this option but before that, you need to calculate the cash flow.
- Top-up loan facility: If you are in need of additional loan then few banks offer you a loan with a relatively lower rate interest. This is given in case if you are ready to transfer your loan to other banks.
- Rate of interest: In balance transfer, the lender usually offers lower interest rates upon transferring to their bank, which reduces your burden of paying huge interest rates to the current lender.
- Not satisfied with the services: When the services provided by one bank is not satisfied, then you can choose a bank that provides much more convenient and better services.