Financial emergencies can hamper your savings. However, with the help of a personal loan, you can overcome this problem quickly and in a hassle-free manner. Since personal loans are multipurpose loans, the loan amount obtained can be used for several purposes. Moreover, with leading financial institutions, you can apply for a personal loan online from the comfort of your home. Instant disbursal, minimal documentation, flexible repayment options and attractive interest rates are some of the added benefits of availing a personal loan from a reputed lending institution. All these features of a personal loan have contributed majorly to its growing popularity amongst the middle class segment of our country. Before availing a personal loan, you should compare various loan offers provided by different financial institutions. This will allow you to avail a personal loan that best suits your requirements.
However, if you have already availed a personal loan, then to reduce repayment burden of the same, you can opt for a personal loan balance transfer. Personal Loan Balance Transfer is a process of transferring existing personal loan to other bank or NBFC. You can avail this facility for better services and lower interest rates offered by a different financial institution.
Since instant personal loans are unsecured loans, it is easier to transfer them as there are no collaterals involved. While transferring your personal loan to a new lender, you’ll have to bear few basic charges that are levied by the new lender to enable a balance transfer. It is essential that you check the eligibility criteria for personal loan balance transfer before going ahead with it
Eligibility Criteria for Personal Loan Balance Transfer
Borrowers can opt for a personal loan balance transfer only if they satisfy the eligibility criteria for the same. Eligibility criteria for a personal loan balance transfer majorly depends upon the creditworthiness and the repayment capacity of borrowers. Borrower can check their eligibility for personal loan balance transfer with the help of an online personal loan eligibility checker. Some of the most common eligibility criteria for personal loan balance transfer are mentioned below:
- The outstanding loan amount has to be at least Rs. 50,000 to initiate personal loan balance transfer process.
- Borrowers should have a clear repayment history. Most financial institutions check at least previous twelve installment payouts of the existing loan before approving the balance transfer.
- One or more additional loans in good standing as per the requirement of new financial institution.
Since personal loan balance transfer involves a stringent documentation process, it is advisable to have all the documents readily available to avoid any inconvenience in the later stages. Below is a list of documents required for personal loan balance transfer:
For Salaried Individuals
- Duly filled personal loan balance transfer form and passport sized photograph.
- Valid ID Proof
- Age Proof
- PAN Card Copy
- Address Proof
- Bank Statement for the last 6 months
- Salary Slip for the last 3 months
- Statement of the current Personal Loan account
For Self-Employed Individuals
- Duly filled Personal Loan transfer form along with a passport sized photos
- Valid ID proof
- Age Proof
- Address Proof
- PAN Card
- Balance Sheet for the last 3 years
- Profit and Loss Statement for the business
- Last 6 months bank statements of the individual as well as the business.
- Statement of the existing Personal Loan account.
Steps to apply for a personal loan balance transfer
- Check the personal loan balance transfer interest rate and calculate interest savings.
- Calculate the approximate cost of personal loan transfer on account of various fees and charges.
- Calculate the benefits and decide if you wish to transfer your loan or not. Shortlist new lenders that you wish to transfer your existing loan to. Compare their interest rate offers, your loan amount eligibility and their loan process
- If you decide to go ahead with the transfer, apply for a NOC and foreclosure letter from your existing lender
- Apply for a loan at a new lender, submit your loan documents with complete repayment record.
- Obtain sanction letter and execute a new loan agreement with the new lender.
- Take disbursement from the new lender by way of cheque/ demand draft in favor of the existing bank and deposit the same with the existing financial institution.
- On receipt of the loan outstanding, your existing lender will cancel all the cheques and ECS and close your loan account.
There are a lot of benefits of opting for a personal loan balance transfer. Lower interest rate, better loan features, increased loan tenure, quality service by the new lender are some of the major benefits that you can avail by opting for a personal loan balance transfer. However, if you have already completed a major portion of your loan tenure, opting for a personal loan balance transfer would not be a wise decision. This is because while opting for a new lender you will have to pay balance transfer processing fee and other charges. By paying such extra charges you may end up paying even more amount than required. Hence, you must access all the aspects of a personal loan balance transfer before going ahead with it.
Let us have a look at some of the major advantages of Personal Loan Balance Transfer
- You can avail an additional top-up loan up to 100% of the amount of the personal loan
- You don’t have to pledge any collateral
- Hassle-free documentation and smooth paperwork
- An attractive interest rate
- Instant process and swift disbursal of the loan amount
- Flexible loan repayment options through EMI
You can also calculate your monthly installment beforehand with the help of a Personal loan balance transfer calculator. Before applying for a personal loan, make sure that you calculate your personal loan eligibility with the help of an online eligibility calculator. This will reduce the chances of rejection of your personal loan application. Additionally, you can calculate your monthly EMI with the help of an online EMI calculator. The results obtained through online EMI calculators are transparent and accurate. This can help you plan your monthly expenses wisely.