Personal Loan Transfer from HDFC to Axis
For various reasons, customers transfer their loan from one bank to another. But it is necessary that as borrowers they look into every aspect of a loan transfer while doing so. Sometimes, people opt for loans with higher interest rates at the times of emergency and get burdened by the monthly installments later. In such cases, they can transfer their remaining balance to a different bank that offers a lower interest rate or extends the tenure of repayments.
Say for example, Ramesh opted for a personal loan from HDFC bank to meet his immediate hospital expenses. But after 3 months when he decided to go for a top up loan, Ramesh learned that he was ineligible for the same at that time. In this situation he decides to transfer his personal loan from HDFC to Axis bank, which offers him a higher loan amount and a reduced EMI.
Please note that the financial institutions mentioned in the above example have been taken only for demonstrational purposes and it's in no way related to the actual terms and conditions on loan products offered by them.
How Loan Transfer Works
Basically, borrowers approach a new bank to repay the outstanding balance in their existing loan and when this happens, they automatically stand indebted to the new lender. Here, the borrower is benefited with lower EMIs while the lender acquires new business. But there are things beyond a lower EMI and an extended tenure that you need to consider while applying for a loan transfer. It's discussed in the points that follow.
Calculation of the Total Amount
Even though your new bank may offer a reduced EMI and a longer repayment period, it should be understood that such offers come with a price of its own. Therefore, make sure that you opt for a loan transfer only after calculating the total cash outgo. Arrive at a decision only after you have compared your existing EMIs against the length of duration offered under the new plan.
Additional Charges during Loan Transfer
While making comparisons between your present loan payment and the new one, always make sure that you include all the additional charges such as stamp duty, processing fee, and legal and technical charges. The processing fee calculation depends on the bank you choose. For some banks it is calculated as a percentage of the outstanding loan amount, while for other banks it's based on the borrower's occupation.
Collateral to New Bank
At the time of loan transfer, make sure that you do not submit the original collateral to the new bank if you have already paid a significantly large portion of the total EMIs. In case you have no other option but to do so, then find out the offers and other benefits that comes along. Even the little things count while making such important decisions. For example, if you are a premium customer of the bank you transact, then you will have better access to their services compared to any new customer. Therefore make sure that you look deeper into each and every aspect while planning your loan transfer.
The Bottom-Line
It is advisable that you do not opt for a loan transfer if there is no considerable difference in the rate of interest offered by the new bank. In addition to that, check the add-ons offered by lenders such as free credit card and accident insurance. Analyse whether such accompaniments are of value, before finalizing the deal.
FAQs on Personal Loan Transfer from HDFC to Axis
- Can I move my personal loan from HDFC to Axis Bank?
You can move the remaining balance of your personal loan from HDFC Bank to a personal account with Axis Bank. To help you decide, you can compare the interest rates on a personal loan from HDFC and Axis Bank. Make sure the savings from switching from HDFC to Axis are substantial enough.
- Is it beneficial to move a personal loan between banks?
The term of the current personal loan can be negotiated when transferring personal loans from one bank to another. Depending on the circumstances, you may be able to get the loan's payback duration shortened or extended.
- Does your credit suffer when you transfer a loan?
As you work towards paying off your debt, a balance transfer might gradually enhance your credit. However, opening additional cards, transferring your balance more than once, or accruing more debt might damage your credit.
- Is the transfer of my debt a bad thing?
As it turns out, switching servicers for your loan won't really affect you much other than having to write a new name on your mortgage cheque and use a different website to execute your monthly payment. The loan type, period, and interest rate that you agreed upon at closing will not change.
- How does a loan get transferred?
Send a letter or a form to your lender requesting a balance transfer, clearly outlining your reasons for doing so. An NOC or consent letter from your lender will be issued to you; your new lender will need it to apply. Contact your new lender and turn in all your paperwork.
- How can I transfer my loan across banks?
Following approval of your loan request, the new lender settles your outstanding personal loan with the previous lender and authorises a new one. You must now pay the new lender's EMIs according to the parameters specified in the loan agreement, including the interest rate and loan duration.
- How do a transfer and a loan differ from one another?
Frequently, balance transfer cards simply let you combine credit card debt. You can use personal loans to combine several debts, such as credit card debt, medical bills, auto payments, and other debt you may have.
- Does transferring a loan have an expense?
You might be able to transfer the loan with some lenders, but not with others. Furthermore, you can be charged a fee for doing so by other lenders. To initiate a car loan transfer, get in contact with the lender. Examining the loan agreement to see what it says about transfers of auto loans is also a smart idea.
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