Pay Lower Interest Rate By Transferring Your Personal Loan
Personal loans are collateral-free loans which mean the borrower doesn’t need to keep any of his assets as security with the lender for availing the loan. However, due to the lack of involvement of collateral, personal loans usually incur a higher rate of interest in comparison to other secured loan products which are backed by some security. During the need of the hour, a personal loan with a higher rate of interest also seems acceptable. But over a course of time, this tends to act as a burden. Repayment of the loan becomes difficult as the hefty amount is deduced as EMI from one’s account.
To save oneself some hard-earned money, one can opt for personal loan balance transfer wherein you make a switch from your current lender who is charging a higher rate of interest to a new lender who is offering lower interest rate deals on the personal loan. It is an excellent way of reducing the monthly instalments and also save on the money which would have otherwise have gone as interest.
Transferring your personal loan entails various benefits viz.
● Reduction in rate of interest to as low as 11.49%.
● Considerable decrease in monthly instalment.
● Saving of money.
● Top-up loans can be availed for meeting financial expenses for travel, wedding, education, medical, consolidation of debts etc.
● Documentation is minimal and one can avail these loans for 5 years loan tenure.
ELIGIBILITY CRITERIA FOR TRANSFERRING YOUR PERSONAL LOAN TO NEW BANK/LENDER
● Decent Credit Score
● Regular repayment history with past 12 EMIs being paid on time.
● Loan amount to be transferred should be at least Rs. 50000.
● The applicant must have an operational personal loan with another bank.
PROCESS OF TRANSFERRING PERSONAL LOAN
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To switch to a lower interest rate personal loan, follow the steps mentioned below:
1. The foremost step is to search for a new lender who can offer lower interest rate deal. One can do so by visiting digital platforms of Fintechs like LoansJagat and compare different lenders for their offerings in terms of interest rate, foreclosure charges etc and choose the one which best meets your needs. On the basis of the lower interest rate deal, you can calculate the savings.
2. Check for the total cost of the transfer. Lenders often charge foreclosure fees and prepayment charges in case of a personal loan balance transfer. Thus, it is important to check for the same and make the calculations beforehand so that you don’t end up paying more at the end of the transfer.
3. After you have zero in on the new lender, apply for a NOC and foreclosure letter from the current lender.
4. Apply for the personal loan with the new lender and submit all the asked for documents.
5. Attain the sanction letter from the new loan provider. Get hold of the new loan agreement and don’t forget to read all the terms and conditions properly.
6. The new lender will clear the loan with your previous lender via cheque or DD. You need to deposit the same with your current lender.
7. As the outstanding loan dues get cleared, the lender will close your loan account and cancel all the ECS/ cheques.
The process of switching from one lender to another takes around 4-8 days.
PERSONAL LOAN BALANCE TRANSFER CHARGES
Different lenders charge different balance transfer charges. The applicant is required to pay the foreclosure charges to their current lender and processing fees to the new lender. The foreclosure charges usually vary from 0-2% of the loan amount whereas processing fees varyfrom Rs. 999 to 2% of the loan amount.
DOCUMENTS REQUIRED FOR PERSONAL LOAN BALANCE TRANSFER
The applicants must keep the following documents handy for quick processing of balance transfer from the current lender to the new lender.
● Duly filled and signed application form along with latest passport size photograph
● Identity and age proof (PAN card/ passport, driving license/ Aadhaar card/ voter id card)
● Address proof (Electricity bill/ telephone bill/ Aadhaar card/ rent agreement)
● Salary slip of last 3 months, and bank account statement of last 6 months
● Personal loan statement of the loan to be transferred.
A personal loan balance transfer is a smart move if done the right way by keeping a tab on all the aspects and by doing the proper calculations. The fintech enablers like LoansJagat helps in making your personal loan balance transfer process smooth and seamless.