Last Updated on March 9, 2024 by admin
Personal loans are a great way to take control of your finances.
However, are you worried about the high amount of EMIs (Equated Monthly Installments) on personal loans you take every month? If yes, do not worry because now you can opt for a personal loan transfer.
Balance transfer helps you reduce your loan burden by paying off current loans at low-interest rates.
In the long run, personal loans can become extremely expensive when interest rates are high or if you do not fulfil the personal loan eligibility criteria. Your ability to repay your debt can eventually become problematic. A balance transfer loan, however, allows borrowers to avoid paying exorbitant instalment rates.
Balance transfers can lower your interest rate, reduce your monthly payments, and ease the burden on your pocket.
What is a Personal Loan Transfer?
When a borrower transfers their outstanding personal loan debt from one lender to another that offers better rates, transparency, and services, it is known as a balance transfer.
By transferring the remaining balance of their current personal loans to a different lender, borrowers can get personal loans at rates lower than those they are now paying on their original loans.
This way, one can reduce the cost of repaying personal loans and their loan EMI burden.
However, a personal loan amount may only be transferred after the lock-in period has elapsed.
They must also be advised that a balance transfer will cost money, including processing costs from the new lender and prepayment fees from the previous lender.
Borrowers can think of switching to a personal loan balance transfer if they are confident it will be profitable.
What are a few of the main advantages of a balance transfer?
A few benefits of moving a personal loan include:
- First, if a person has high-interest personal loans, a balance transfer could save hundreds – even thousands – of Rupees over a period.
- One of the simplest methods to consolidate debt is to transfer a personal loan amount, allowing for better terms and lower EMIs.
- Balance transfers allow borrowers to consolidate debt without paying any interest while giving them time to repay the debt later.
- When borrowers move lenders, they not only profit from shifting the debt at a lower interest rate but also from the better services offered by the new lender.
- Using the loan transfer option is possible even if a person is currently repaying a loan.
- Additionally, the new lender offers top-up credit to consumers at low-interest rates and a longer payback period.
- To lure clients away from rivals, lending institutions typically offer attractive interest rates. Such competition ends up being favourable for the borrower.
- Lenders also allow borrowers to extend repayment tenure, allowing them to pay smaller instalments.
Why does one opt for a personal loan balance transfer?
The following factors influence borrower choice of balance transfer loans:
- One of the numerous benefits of refinancing a personal loan is that the interest rates will be lower than they are now. The borrower can reduce its monthly expenses if the new lender has cheaper interest rates.
- A borrower can acquire a personal loan from Fullerton India; at a competitive interest rate that starts at 11.99% per year with easy personal loan eligibility criteria.
- Another justification for changing the existing lender is that the new lender is offering better services and the borrower is dissatisfied with the present lender.
- One excellent benefit of shifting personal loan debt is that borrowers can raise their credit score by making payments more rapidly.
- While the previous lender might not have offered it, some lenders can let borrowers extend the length of their repayment period. They can pay less each month and better manage their money if they extend the duration.
How does a personal loan balance transfer work?
If borrowers transfer the balance of a personal loan, the new lender settles the outstanding sum. They could be required to pay such fees if their current loan contains a prepayment provision.
They must also pay the processing costs for their new loan in addition to this. However, these costs are less when you consider the savings from the reduced interest rate.
Additionally, borrowers may use their free personal loan balance transfer calculator to see how much money they can save by choosing the balance transfer and estimating the loan amount they are qualified for.
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Conclusion
Surprisingly, few people who have taken out loans use the extremely advantageous balance transfer option. Its lack of awareness is the issue.
Every person who has taken out a loan ought to choose a balance transfer at least once while the loan is still outstanding. Balance transfers allow significant savings due to the lower interest rate charged by the new lender.
When considering a personal loan balance transfer, research the services and products offered by several lenders to get the personal loan interest rates that suit your requirements and preferences.
