Personal Loan Balance Transfer

How to Transfer Personal Loan Balance

The main reason why balance transfer became a prominent part of banking is that customers began transferring their balances from one credit card provider to another, because transferring their debt from the credit card that came with a higher rate of interest to one that charged lower rates of interest significantly eased their financial concerns. A section of the customers utilised the concept smartly and transferred funds from one credit card to another to evade late fees. The transfer from one credit card to another can be done for either a very low fee, or in most cases, for no fee whatsoever. Sometimes, the customer would have to make repayments for the minimum balance due after which they were required to pay interest on the outstanding balance.

The option of balance transfer is now available with other debt instruments like home loans, personal loans, etc. When it comes to Personal Loans, the main aim of a balance transfer is to move the outstanding loan amount from one bank to another. Here are some of the other reasons why customers may opt for a balance transfer.

Attractive Rates of Interest

If a customer working at a mid-sized firm attains a loan from Bank 1 and transfers to a large and established company that falls under Category A, the rate of interest offered by the bank to the customer will be slightly better. In case the current lender drops the rate of interest, the customer has the option to move the outstanding loan amount to Bank 2 for a minimal fee and this reduce the EMI payments.

Bank Offers on Personal Loan Balance Transfer

In case a customer has attained a loan from a particular bank and has been making repayments regularly, and if the customers profile meets the eligibility criteria of any bank, banks will intend to have the customer as it makes them sure that the customer has the ability to make repayments on time owing to their past records. In a situation like this, several banks tend to offer interest rates that are considerably lower than what other banks are offering you, by around 2% to 3% should you opt for balance transfer.

Bank Service Challenge

If there are times when a customer is not satisfied with the bank and the services they are providing, and wish to stop using the bank’s services, they can go for a balance transfer as it can help them migrate to another financial institution that provides better service.

Top-up Loans

There may be instances when a customer wishes to undertake a balance transfer because he/she intends to borrow additional funds. In case the customer has already taken out a regularly-serviced loan with a particular bank and is in need of more money (known as a top-up loan), a different bank may be willing to offer the customer a Top-Up Loan at a considerably lower rate should the customer agree to undertake a balance transfer for the purpose of transferring the outstanding loan amount to them.