Proper personal finance management is essential to add to your savings! However, not everyone can manage their finances accurately all year round. Business investments and personal expenses often contribute to excess expenses, which makes people apply for a personal loan.
Applying for a loan is very simple. No one gets it wrong. Hence, the moment the loan gets approved, you receive the money in your account, for your personal and business use. However, personal loans might look simple, but there’s a catch! It comes with an increased interest rate, which is between 15% and 20%. So, when you pay very high interest on your personal loan, you can opt-in for a personal loan balance transfer.
Understanding a personal loan balance transfer
Simply put, personal loan balance transfer means the procedure of transferring all the outstanding personal loan balance. It gets transferred from one loan provider to the other. Usually, the process involves in moving the entire outstanding balance that your credit card has to another account. And it comprises of home loans, personal loans, and other loans as well.
Knowing about personal loan balance transfers aren’t enough! If you wish to put this into practice, you need to about its advantages as well. The crucial benefits are as follows:
- Â Â You have access to an improved interest rate
Regardless of whether you wish to transfer the current personal loan from one bank to another, it is essential to opt-in for the interest rate that the second bank provides. However, it makes sense if the interest rate is low. Then it’s a wise decision. A reduced interest rate is always a smart choice. It helps you to minimize the financial burden and also enable you to pay your entire loan quicker.
- Â Â Banks provide attractive deals
Do you have a record of paying all your EMI’s on time? If yes, then there are specific banks that will keep track of this trend and provide you with the best deals on your personal loan balance transfers. Also, the eligibility criteria are elementary, if a person has a favourable credit score. The banks might also provide you a reduced interest rate.
Additionally, banks can also charge you a reduced amount for their balance transfer. In such situations, you have the chance to browse through all the choices that are accessible for you. You can go ahead and select the best personal loan that caters to your requirements. It also adds to your financial profits.
- Â Â You also have the option to make use of a top-up loan
There are situations where the capital that you borrow at the start as loan might not be ample for catering to all your business or personal needs. And when this happens, you can choose a top-up loan as well. Here you get to borrow extra cash on the current loan amount. Sometimes a loan provider might not agree to provide you with a top-up loan. They might also refuse to offer you a great deal. Making use of personal loan transfers is a wise decision.
There are times when a very different bank might be interested in providing you more funds at an improved interest rate. It is applicable when you decide to transfer the loan amount on the bank. You also get the choice for managing your loan time based on your requirements. To decide about the amount for your top-up loan and the time, you can make use of an EMI calculator to receive an estimation concerning your instalment percentage.
- Â Â Select a bank that has improved service
Not every time will you get the best working association with a bank! There are times when you might think of parting your ways with a specific bank, as you are not happy with the services provided. Here you have the choice of selecting a different bank that provides improved service. It will help you with loan transfer management and ensure that it takes place seamlessly. Additionally, to the excellent service, people have a chance to get an enhanced deal.
Things you should consider before transferring the personal loan
Typically, the entire procedure of transferring the overall personal loan balance is available at a price! Some banks might charge you with the processing fee. The fee amount can be about 0.5 compared to 1% of your overall loan amount. Also, if the loan amount is more, then the fee amount will increase. Hence, before you decide to transfer the loan, get in touch with a service provider, and check whether it can get waived off or at best minimized. When they agree, then it might bring down the entire financial burden to a considerable extent.
There are many ways to go about it! First, make sure that you read through all the terms and conditions of your new loan. There might be prepayment charges as well as a penalty. Usually, prepayment is the best way to clear most of the debts that takes place before the finish of the tenure. Generally, different banks have their conditions concerning prepayment. And you need to know about it before you decide to make a prepayment. And the terms of prepayment will most likely differ between the current and the second bank.
Additionally, you must also ask about the repayment date with the current date. When you are making the personal loan transfer, the repayment date might change. And it might make you end up in missing out on a payment scope, especially if you don’t have any idea about it.
You can also opt-in for personal loan balance transfer for top-up loan purposes. Even self-employed people can opt-in for this loan. However, it is essential to gather all the required bank documents to opt-in for the personal loan balance transfer. Other than that, evaluate the new order properly and see if it works in your favour. Make sure you are aware of the costs involved and interest rates accurately. It will help you to decide better on the transfer. Last but not least, choose a bank that has the best reputation for this transfer. Â
