A Personal Loan balance transfer is a process wherein a customer transfers the total outstanding Personal Loan from one bank to another. It usually happens when the new bank extends a lower rate of interest on the outstanding loan amount. Hence, the primary purpose of a Personal Loan transfer is to decrease the overall burden of debt.
Benefits of Transfer Personal Loan
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.
Reduce the current EMI
If paying the current EMI is becoming a burden on your budget it is important to plan your finances. Reduce your stress with a balance transfer: a lower EMI can be achieved by a reduction in the rate of interest and increasing the tenure. Apply timely as default or delays in payments can spoil the repayment record and should be avoided at any 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.
To get an Additional Loan amount or Top Up
The rate of interest offered for a Balance transfer is also valid for additional funds approved as a Top Up. With a request for Balance transfers of your Personal loan apply for the extra amount you need, as a top up to the original loan amount. Get the additional funds in a single loan, with the lowest rate of interest.
Better Features
Choosing to refinance your personal loan may help you fetch better deals from the new lender which may be in the form of low interest rate, low processing fee, etc. In a few cases, it may also help you end your association with a lender whose services you are dissatisfied with and establish a relationship with a new lender.
Eligibility Criteria for PLBT
The eligibility criterion for a personal loan balance transfer is the same as for a personal loan and varies from lender to lender. However, the basic eligibility criteria that most lenders look for, have been given below
Documents required for PLBT
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:
Conclusion
A personal loan balance transfer is the working concept in which the outstanding amount of existing loan is transferred from one financial institution to another. The primary motive behind this transfer is to avail better terms including a lower interest rate. The basic objective of a personal loan balance transfer is to decrease the burden of your debts altogether.