Balance Transfer Personal Loan - Personal Loan Balance Transfer

Steps To a Balance Transfer With Your Loan Advisors

Confirm current loan eligibility for transfer.

Prepare requisite documents.

Identify the Best Bank/ NBFC for the Transfer.

Avail the transfer of your loan in the comfort of your premises.

Annual costs of a personal loan Balance transfer

Rate of interest calculated @ reducing balance for the loan tenure	10.25% to 13.25%
Rate of interest calculated per year	5.5% to 7.46%
Processing fees	0.25% to 1%
Tenure allotted	12 to 60 months

* Pre-closing, part payment, and other charges will be levied per the lender's policy.

Representative example of the annual costs of a Personal loan balance transfer

Loan amount	₹ 2,00,000
ROI reducing	11.00%
ROI Flat	6.09
EMI	₹ 4348.48
Processing fees (one time)	₹ 1000
Annual cost of the loan	₹ 52181.82
Total cost of the loan	₹ 260909.08

What does the term Balance transfer of a Personal loan mean?

Balance transfer of a Personal loan is defined as transferring an existing Personal Loan from the parent organisation to another Bank or Financial Institution. The priority for balance transfer is returning the loan successfully without delays or bounces.

With this initiative, banks taking over Personal loans are assured of an increased turnover with a minimum default. Better terms and conditions, such as a minimal rate of interest and processing fees, are offered to lure good customers and convince them to transfer their Loan accounts.

Benefits

Features

Eligibility Criteria

Process

Fees and Charges

What are the benefits of a Balance Transfer Personal Loan?

It is advisable to transfer the Balance of your loan at least once during the tenure; it can be beneficial in the following scenarios.

For a Lower Rate of Interest

Banks offer the best rates available for a Personal Loan Balance Transfer to customers with a good track record of timely payments. Customers paying an inflated interest rate should check for the personal loan balance transfer lowest interest rate and consider transferring their loan as soon as permitted.

Refer to the example below, depicting savings via a Balance transfer with a reduced rate of interest:

Cost analysis of the existing Personal loan
Loan Amount	₹7,00,000/-
Repayment Tenure	36 months
ROI @ Monthly Reducing Balance	14.50%
ROI Applicable Flat Per Year	7.97%
Monthly EMI	₹24,094.68
Amount Paid as Interest Over 36 Months	₹167408.63
Principal Amount Repaid Over 36 Months	₹7,00,000
Cost of a Personal Loan For ₹ 7 Lakhs	₹867408.63

With a Balance transfer after 12 months
Principal Amount Balance	₹ 5,00,000
Repayment Tenure Applied	24 months
ROI @ Monthly Reducing Balance	10.99%
ROI Applicable Flat Per Year	5.92%
Monthly EMI	₹23,301.60
Principal Amount Repaid	₹200622.39
Amount paid as interest over 24 months	₹59,238.35
Cost for ₹7 lakhs with a Balance Transfer	7,59,861.00
Savings with a Balance Transfer	₹1,07,547.63

To reduce the current EMI

If paying the current EMI is becoming a burden on your budget, it is essential to plan your finances. Reduce your stress with a balance transfer: a lower EMI can be achieved by reducing the interest rate and increasing the tenure. Apply timely, as default or payment delays can spoil the repayment record and should be avoided at all costs.

Demonstrated below is an example of EMI reduction via a Balance Transfer

Details of existing personal loan
Loan amount	₹7,00,000/-
Repayment Tenure	36 months
ROI @ Monthly Reducing Balance	13.50%
Monthly EMI	₹23754.7

Post a Balance Transfer After 12 Months
Principal amount post-balance transfer	₹5,00,000
Repayment Tenure Applied	36 months
ROI @ Monthly Reducing Balance	10.50%
Monthly EMI	₹16251.22

To get an additional Loan amount or Top-up

The personal loan balance transfer interest rate is also valid for additional funds approved as a Top-up. When you request balance transfers of your loan, apply for the extra amount you need to top up the original loan amount. Get the additional funds in a single loan with the lowest interest rate.

The illustration below shows the creation of eligibility for a Top-up amount.

Details of existing loan
Loan Amount	₹7,00,000/-
Repayment Tenure	36 months
ROI @ Monthly Reducing Balance	13.50%
Monthly EMI	₹23754.70

Post a Balance transfer after 12 months
The principal amount post-balance transfer	₹5,00,000
Repayment Tenure Applied	36 months
ROI @ Monthly Reducing Balance	10.50%
Monthly EMI	₹16251.22

With a Top Amount of ₹ 3 Lakhs
Loan Amount	₹8,00,000/-
Repayment Tenure	48 months
ROI @ Monthly Reducing Balance	10.50%
Monthly EMI	₹20,482.70

To create additional eligibility

All Banks have a system to calculate the maximum Loan amount that can be lent to a loan seeker. This loan amount is calculated per the income earned & the total obligations, including loan EMI’s & Credit Card outstanding.

If you plan to buy a new home or a new Vehicle at this juncture and need an additional Loan, create additional eligibility by taking a Balance transfer so that your new loan application is successful.

The Key Features for a Personal Loan Balance Transfer.

The tenure allotted for a Personal Loan Balance Transfer is from 12 to 60 months, granted on the basis of the loan amount sanctioned and the applicant's eligibility to re-pay the EMI.

Loan Amounts offered by leading Banks/NBFC’S for a Balance Transfer and Top Up are from a minimum of ₹ 50k to a maximum of ₹ 30 Lakhs.

A Personal Loan Balance Transfer is unsecured and offered without any security or guarantee, no mortgage is needed to secure funds via a Personal Loan.

The Balance Transfer is processed on behalf of convenient documentation: the income and KYC, as well as documents giving details of the existing loan that are readily available.

To secure the balance transfer of a personal loan, the applicant's CIBIL score must be above the required benchmark.

The BT transfer personal loan process is quick and convenient: with complete documents provided, the request is approved within 72 hours.

The eligibility criteria for Personal Loan Balance Transfer

The following are the criteria generally applied to applicants seeking a Balance transfer for their existing personal Loan, though each lender may have its terms and conditions.

The minimum amount accepted for a Balance transfer is 50k. Thus, the principal balance of the existing personal loan should be more than 50k.

The terms & conditions for pre-closure, as stated in the personal loan agreement, should be fulfilled. The applicant should have repaid the number of EMIs mandatory to facilitate a pre-closure.

The personal loan repayment track must be clear with an on-time repayment record.

The applicant's CIBIL Score must be above the required benchmark. The applicant's other credit lines should have satisfactory repayment histories.

The applicant's profile should be acceptable per the external Bank's terms and conditions.

Documents required for the Balance Transfer of your loan

Income Documents

Salary Slip for the last three months.

The bank statement from the salary account for the last three months shows three salary credits.

Form 16 for the last financial year.

Pan card copy.

KYC Documents

Copy of Aadhaar Card

Current/Permanent Address proof

Company ID

2 Passport size photographs

The track/loan schedule of the existing personal loan for balance transfer is accompanied by an application to transfer the principal balance amount of the existing loan.

Checklist for a successful Personal loan Balance transfer.

For a successful Balance transfer, it is advisable to check the following before applying:

Identify the Financer for the Balance transfer

Our Advisors will help you study the market offering and identify the most suitable finance for your Balance transfer, offering the lowest interest rate.

Calculate the cost of the transfer

If the balance transfer is being appended for savings, calculate the financial implications. The charges in question will be.

The amount is to be paid as the pre-closure charge if applicable.

The EMI will post the balance transfer and the total cost of the loan.

The processing fees for the transfer.

Verify pre-closure terms of your Loan

confirm if the parent Bank permits the transfer, i.e. that the minimum no numbers of EMI are to be paid as per the pre-closure clause of the personal loan agreement and obtain a NOC.

Facilitate your application well before your next EMI

It is practical to process your balance transfer with enough time to complete it without undue stress, and the principal amount is paid back before the next EMI is presented.

Apply to the external Bank

Having checked the prerequisites and worked out the savings and advantages of the personal loan Balance transfer, “Your loan advisors” are well placed to suggest the appropriate Bank /NBFC to further your request.

What is a ‘Top’ criterion with a Personal Loan Balance Transfer?

An applicant seeking to transfer a Personal loan to an external Bank can apply for an additional loan amount as a top-up; the significant features include the following.

The loan amount granted as a top-up will be calculated per the Lender's eligibility criteria.

The loan amount granted as a Top-up will be transferred directly to the applicant's salary account after the transfer is completed.

A single Emi is instated for the total loan amount sanctioned for a Balance transfer and the top-up amount.

The top-up is offered at the same reduced rate of interest applied to the Balance transfer.

The loan amount sanctioned as a top-up can be used to pay pre-closure charges for the existing loan or any valid personal requirement.

The Process for the Balance transfer of a Personal loan is as follows:

Following are the stages to a successful Balance transfer of a Personal loan:

The process for application of Personal loan Balance Transfer

Check the existing Personal loan Balance transfer offers from external Banks for the most suitable terms.

Obtain the loan track of your existing loan to determine its principal balance. The loan track will establish the number of EMIs paid and the principal amount repaid.

Finalize the loan amount to apply for balance transfer personal loan: This includes the principal balance of the existing loan, pre-closure charges and any additional amount needed for personal usage.

Complete all documentation requirements and submit them to the Bank. Giving authentic and transparent copies is vital to expedite the loan process.

You can also apply for a personal loan balance transfer online by providing soft copies of your documents.

The Bank will process the loan application per its regular verification & approval procedures.

The final decision will be communicated to the applicant. A loan agreement with all the terms and conditions will be initiated if the request is approved.

The process for Disbursal and takeover of the existing loan

A Banker's draft or pay order is made in the name of the parent bank for the principal balance due and handed over to the applicant.

The applicant must close the existing loan by depositing the draft, clearing all dues, and obtaining a closure letter.

After the proof of closure is submitted to the financer taking over the loan, the process for personal loan transfer to other bank is completed.

Any additional amount approved as a top-up will be transferred directly to the applicant’s Bank account.

A fresh EMI will now be presented to the applicant's account.

This completes closing your existing Personal Loan and starting your new loan account.

Terminology is used in the process of a personal loan balance transfer.

We endeavour to make it simple for your convenience; explained below are standard terms used in the Balance transfer process:

Balance transfer: A Personal Loan balance transfer is a process wherein a customer transfers the total outstanding Personal Loan from one bank to another. It is usually done for better terms and benefits.

Principal loan amount: The Principal loan amount refers to the Original Loan amount borrowed from the Bank. The principal loan amount reduces with the payment of the monthly EMI. When the balance transfer of personal loan is affected, the balance outstanding on the principal loan amount will be taken over.

Re-payment Schedule of a Personal Loan: The re-payment or amortisation schedule is a chart or table depicting the repayment pattern of a personal loan to the Bank or financer. It also shows the principal & interest quotient of each EMI.

The Loan Track: An applicant can request the Loan Track of the existing personal loan from the concerned Bank. The track of a Personal loan gives details of the status of the Personal Loan, including:

The Loan amount disbursed

The repayment tenure applied

The number of EMI’s paid to the bank successfully/pending/bounced

The total loan amount is paid back to the bank.

The principal balance outstanding

Top-Up Amount: Any additional amount can be requested with the personal loan BT request, known as a Top-up. Thus, the loan amount applied will include the principal balance of the previous loan amount and the Top-up. The interest rate and other terms and conditions are applicable for a Balance Transfer will be valid for the total loan amount.

Pre-Closure: A pre-closure is when a personal loan holder wants to return the loan amount borrowed from a Bank or financial institution before the completion of the loan tenure. The terms of the agreement govern the pre-closure of a Personal loan. The policy for pre-closure varies according to the rules and regulations of different banks. The condition of a minimum number of EMI, S, is to be paid before the applicant can prepay the loan amount. The loan will only be eligible for a Balance transfer if the pre-closure terms are met.

Personal Loan BT process: This is the personal loan balance transfer process abbreviation.

What are the charges for a Personal loan Balance Transfer?

Rate of interest: The interest rate is the primary charge for the loan amount forwarded as a Balance transfer. It remains constant for the entire tenure. Lenders offer attractive rates to eligible clients for taking over the existing loan.

Processing fees: The processing fee is a one-time file charge deducted from the loan amount disbursed. Per the lender's policy, the cost is based on a fixed slab or a percentage of the loan amount.

Pre-closure charges: The applicant may have to pay a charge to close the existing loan. The charges can be up to 4% of the principal balance. The applicant can pay this amount from personal funds or include it in the loan amount.

Personal Loan Transfer Charges of Leading Banks

BANK/NBFC	INTEREST RATE	PROCESSING FEES	TENURE	LOAN AMOUNT
HDFC BANK	10.75% to 12.50%	₹ 2999/- to ₹ 3999/-	12 to 60 months	₹ 25 lakhs
ICICI BANK	10.75% to 13%	₹ 1000/- to ₹ 6000/-	12 to 60 months	₹ 25 lakhs
AXIS BANK	11% to 12.99%	₹ 3999/-	12 to 60 months	₹ 25 lakhs
KOTAK BANK	10.75% to 12%	₹ 3999/-	12 to 60 months	₹ 25 lakhs
YES BANK	10% to 12%	₹ 1000/- to ₹ 9999/-	12 to 60 months	₹ 25 lakhs
TATA CAPITAL	10.99% to 11.49%	₹ 2999/- to ₹ 3999/-	12 to 60 months	₹ 25 lakhs

We are ready to answer all your queries about the Balance Transfer programme. Some FAQs are explained here under.

Who can apply for a Balance Transfer of their loan?

All existing Personal Loan holders running their loans successfully can apply for a balance Transfer. To apply for a transfer, a principal loan amount of ₹ 50,000 should be the balance.

When can a balance transfer of an existing personal loan be made available?

A balance transfer can be made any time during a personal loan's tenure, provided the pre-closure terms and conditions are fulfilled.

At what stage/time should the personal loan balance transfer be taken?

Take a transfer of your loan as soon as possible to gain the maximum benefits.

How long does achieving a Personal Loan for Balance transfer take?

The total time taken from the time an application is submitted until the old loan is closed could take a week to 10 days, so plan your balance transfer with enough time before the next EMI hits the account.

Is there a possibility that the request for a Balance transfer may be rejected?

The Bank will process the Personal Loan Balance transfer application as a fresh personal loan application. To be accepted, it must satisfy the terms and conditions as per the policy.

Will the CIBIL score be considered for a Balance Transfer?

Most Banks require a minimal CIBIL score for personal loan approval; a lower score may be accepted if the personal loan has a record of timely payments.

Are Personal loans from all Banks and NBFCs eligible for a Balance transfer?

The external Bank or NBFC must approve the parent financer to take over the existing loan.

Can I change my loan tenure after the balance transfer?

The request for a Balance Transfer is viewed as a fresh loan application. If eligibility permits, the applicant can request a 12—to 60-month tenure, depending on his ability to pay the EMI.

Is it possible to balance and transfer multiple personal loans?

After the balance transfer, an applicant's existing personal loans can be transferred and clubbed into a single personal loan.

Is the Personal Loan Balance transfer always beneficial?

A balance transfer of Personal Loan is advantageous if it serves a specific need or affects significant savings. However, it is only sometimes a good option, so contact your loan advisors for a complete breakdown of the costs and savings before applying for a balance transfer.

What are the significant costs of a Personal loan Balance transfer from one Bank to another?

The significant costs of a balance transfer incurred are;

The pre-closure Charges are the charges to be paid to the parent bank. They vary according to the bank's policy and are calculated on the principal loan amount balance.

The Processing fees: Most Banks charge minimal processing fees for Balance Transfers. The costs are calculated based on the Loan amount approved.

It is advisable to check the costs using a personal loan balance transfer calculator beforehand.

Is applying to more than one Bank for a Balance Transfer possible?

Application for a Balance transfer can be forwarded to more than one Bank. Still, the same is not advisable as it can adversely affect your CIBIL score, so apply to a single Bank using our services to help you identify the right Bank for the balance transfer of your Loan.

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