Personal Loan Balance Transfer

Personal loan balance transfer (PLBT) is the process of transferring your personal loan from your present lender to a new lender. If you have an outstanding loan with a high interest rate, you can transfer it to another lender and enjoy a lower rate of interest. This transfer of balance allows you to lower the burden of your monthly obligations.

Before choosing the balance transfer facility, it is crucial you compare the interest rates offered by leading banks and financial institutions of the country. Find more details in the table below:

Note that the interest rate mentioned in the above table is indicative and can change as per the bank’s discretion. 

Interest rate is a major factor that affects the overall affordability of your loan. Besides, there are a few associated charges that can significantly affect your loan cost. Find details about them in the table below:

Note that the charges mentioned in the table are not absolute and may change as per the lender. Additionally, some lenders do not levy any charges on loan foreclosure or prepayment.

You can easily transfer your personal loan from one lender to another by following the steps mentioned below:

• Step 1: Check the interest rate, processing fee, and the loan tenure that the new lender is offering. It is a good idea to check for a balance transfer offer with multiple lenders and then shortlist one best suited for you.

• Step 2: Compare the new loan offer with your existing loan and calculate the savings. Make sure that you also consider other charges such as foreclosure charges (to be paid to your present lender) and the processing fee of the new loan.

• Step 3: Once you have decided to transfer your loan to a new lender, apply for foreclosure with your present lender and obtain an NOC (No-Objection Certificate) for the same.

• Step 4: Start your balance transfer application with the new lender. You will be required to submit the NOC obtained from your old lender to the new lender.

Once the balance transfer process is complete, your old lender will receive the outstanding amount from the new lender. Post this, you owe the outstanding amount to the new lender.

The following are the key eligibility criteria for a Personal Loan balance transfer:

• The outstanding loan amount has to be at least ₹50,000

• You need to provide a record of your personal loan EMI payment. Ensure all of them are cleared or at least the previous twelve instalment payouts of the existing loan will be checked

• If you have numerous loans/credit cards, you need to ensure all are in good standing as per the requirements

You need to submit the following documents while applying for a personal loan balance transfer:

Let us assume that you have taken a personal loan of ₹5 Lakhs from a bank/NBFC at an interest rate of 15% p.a. for a tenure of 5 years. Now, after having paid 12 EMIs, you wish to transfer this loan to a new lender who is charging an interest rate of just 11.50% p.a. In this case, you will be saving ₹35,710 on the total interest amount. The following table gives you an illustration of the EMI payable to the new lender and your net savings:

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.