When you avail a Personal Loan, you do your research regarding various parameters. Wherein, rate of interest is one of the most crucial aspects of any Personal Loan. As the repayment tenor for a Personal Loan can extend up to five years, even a slight variation in the interest rates can have significant financial implications.
Most financial institutions offer the option of Personal Loan Balance Transfer to its customers. To opt for this facility, the borrower must foreclose the existing loan account and start a new loan account with the new financial institution. All the details pertaining to exercising option are explicitly incorporated in the loan agreement and are binding on both the parties.
If you have availed an SBI Personal Loan or another Personal Loan in the recent past and have been repaying your EMIs on time, you can be eligible for Personal Loan Balance Transfer with another financial institution at better interest rates.
Let’s understand Personal Loan Balance Transfer in detail below:
Personal Loan Balance Transfer is the facility offered by financial institutions to the customers (borrowers) of other financial institutions. Under this facility, you can transfer your existing loan account to another financial institution. This process is completed by foreclosure of the existing Personal Loan account by repaying the entire dues. After the existing loan account is closed, a new Personal Loan account is opened with the new financial institution. All the terms and conditions of the new lender will govern the loan account until repayment.
Personal Loan Balance Transfer is an option that is exercisable entirely at your prerogative. There are various circumstances and factors that must be taken into account before taking a decision. Some of the crucial aspects that you must consider before exercising this option are: –
Rate of Interest: The rate of interest offered by the new financial institution should be significantly lower than what you are paying to the existing lender. Otherwise, you will not save enough money on your loan repayments.
Repayment Tenor: Ideally more than half of the repayment tenor should be remaining to make Personal Loan Balance Transfer a profitable option for you. If the tenor is near competition, the benefits to be accrued are not significant.
Foreclosure Charges: – Foreclosure charges levied by your existing lender should be taken into account. Some lenders charge up to 6% foreclosure charges, which can reduce the benefits you can get from the new lender.
Relation with the lender: If your relationship with the existing lender is not ideal, then you can seek out a new lender and enjoy the benefits of a cordial relationship.
Consider APR: APR or Annual Percentage Rate specifies the total cost of a loan that you have to bear for one year. Compare the APR of the lenders before opting for a balance transfer.
With a multitude of financial institutions operating in India, the decision regarding transferring your Personal Loan could get a little confusing. Here are 10 top lenders for a Personal Loan balance transfer that you can consider.
State Bank of India: – SBI is the leading public sector bank in India and offers Personal Loans at attractive features and competitive interest rates. SBI Personal Loan Interest Rates start from 11.9% p.a and come with a repayment tenor of up to 72 months. Loan facility is extended in terms of Overdraft as well as Term Loan.
ICICI Bank: ICICI Bank is a premier private sector bank in India and offers the facility of the Personal Loan balance transfer. The rate of interest charged by ICICI starts from 11.2% with a maximum repayment tenor of up to 60 months. Customers can also opt for Top-Up loans.
HDFC Bank: Leading private sector bank of India, HDFC Bank also offers the facility of a balance transfer on Personal Loan. With interest rates starting from 15.5% p.aand repayment tenor of up to 60 months, customers can opt for amounts of up to Rs. 40 Lakhs.
Bank of Baroda: – One of the most reliable financial institutions of India, Bank of Baroda offers personal loan balance transferfor up to Rs. 10 Lakh in metro cities and Rs. 5 Lakh in semi-urban centers with a maximum repayment tenor of 48 months. Rate of interest is calculated based on the MCLR and risk rating of the customer.
Tata Capital: Tata Capital offers Personal Loan balance transfer facility for up to Rs. 20 Lakh to its customers with the rate of interest starting from 11.2% p.aand repayment tenor extending up to 60 months. Customers also get the option of Overdraft against the loan account.
Bajaj Finserv: A leading NBFC in India, Bajaj Finserv offers the facility of personal loan balance transfer for its customers with a repayment tenor of up to 60 months. The maximum amount available is Rs. 25 Lakh while the interest rate starts from 12.9% p.aonwards and disbursals are processed within one working day.
Indian Overseas Bank: Indian Overseas Bank offers the option of Personal Loan balance transfer for amounts up to Rs. 5 Lakh with interest rates starting from 11.9% p.aonwards. The maximum repayment tenor available is 60 months.
Axis Bank: Axis Bank offers personal loan balance transfer facility for amounts up to Rs. 15 Lakh with maximum repayment tenor being 60 months. Rate of interest starts from 16% per annum.
Canara Bank: Customers can opt for Canara Bank for transferring Personal Loan up to Rs. 3 Lakh and repayment tenor of up to 60 months. This facility is available only to those customers who can maintain a Salary Account with Canara Bank.
Kotak Mahindra Bank: Kotak Mahindra Bank offers personal loan BT for amounts up to Rs. 15 Lakhs at an interest rate starting from 10.99% p.a onwards for repayment tenor of up to 60 months.
Be an informed borrower and keep a close eye on the available interest rates before you opt for a Personal Loan Balance Transfer. Timely decisions can help you save significant sums of money.
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