Maybe you’ve availed of a personal loan from a lender, but its terms aren’t suiting your financial requirements anymore. Why not choose another lender and get a product that truly meets your needs?
It is indeed possible, through a personal loan balance transfer. This is where you shift your ongoing loan’s outstanding principal amount to another lender. Why? Because they are willing to offer you compelling benefits like a lower interest rate, flexible tenure, etc.
A balance transfer helps you reduce your overall debt burden. Additionally, you don’t need to provide any collateral to make the transfer. You just have to bear nominal charges like processing fees, foreclosure charges, stamp duty, etc.
If you’re unclear about how to transfer your loan balance, here is everything you need to know.
Fulfilling eligibility criteria
To begin with, you must first meet the lender’s eligibility requirements for transferring the balance. While they may vary, the generic ones are as follows:
- Creditworthiness and repayment capacity mainly determine your balance transfer eligibility. Thus, a healthy CIBIL score is a must. Use online personal loan eligibility calculators to understand if you are eligible to transfer your outstanding loan balance to a new company.
- A 700 CIBIL score or higher is generally required.
- The current outstanding loan must be Rs. 50,000 or higher, to initiate the transfer.
- Lenders usually check the previous 12 EMI repayments to evaluate your eligibility. So, you must maintain a spotless track record of timely installments.
Lenders vary in their required documentation to transfer personal loans. However, common ones include:
- Passport-size photographs
- Duly-attested balance transfer application forms
- PAN card, voter ID card, Aadhaar card, passport, driving license, etc. as identity proof
- PAN card copies
- Driving license, PAN card, Aadhar card, voter ID, passport, etc. as age proof
- Aadhar card, landline bill, passport, rent agreement, latest electricity bill, etc. as address proof.
Transferring a personal loan for self-employed and salaried individuals requires the following: –
- GST number or TAN card
- Current lender’s statement of personal financing, along with its transferring details
- Business’ profit and loss statements and the last three year’s balance sheet
- Business and individual entity’s bank statements for the previous six months
- The last 6 months’ bank statements
- Last 3 months’ salary slips
- Current lender’s loan statement for transferring
How to apply?
Here’s how you can receive the balance transfer:
- Evaluate current personal loan interest rates from other lenders and check your interest savings.
- Calculate the approximate transfer cost by including the applicable fees such as processing and foreclosure charges.
- Compare other lenders’ interest rates, their loan procedures, and your eligibility.
- Once you have finalized a new lender, file for a foreclosure letter and a No-Objection-Certificate (NOC) from the existing one.
- Start the application procedure with your new lender by submitting all documents and repayment records.
Additional Read: How to Apply for a Personal Loan in 5 Simple Steps?
Benefits of Personal Loan Balance Transfer
There are several features of a personal loan balance transfer that can benefit you in the long run. These include-
Lower Interest Rates
One of the primary objectives of a loan balance transfer is availing of lower interest rates. You can simply switch to a lender that offers a better rate of interest than your current lender and reduce your overall interest payments.
Longer Repayment Tenure
If you’re not comfortable with your current loan tenure, you can transfer your personal loan balance to a new lender that offers longer repayment tenure. This will reduce your monthly EMI burden. But remember, a longer tenure will increase your overall interest payouts for the loan.
Top-up Personal Loan
When you transfer your personal loan balance, you can also avail of top-up benefits. Many lenders offer this facility to borrowers who transfer their existing loans. This is particularly beneficial if you can’t avail of a top-up facility with your current lender or have to pay high interest on it.
Expedite the whole process with a friendly lender
Looking for a supportive lender who facilitates loan transfers? Turn to Tata Capital, where we offer personal finance balance transfer and multipurpose loans at affordable interest rates and repayment terms.
Calculate your EMIs with us by using our online personal loan EMI calculator. To know more, log on to our website or give us a call today!