Personal Loan Balance Transfer is a credit facility that allows existing personal loan borrowers to transfer their existing personal loan accounts to other lenders offering lower interest rates. This not only reduces the EMI and interest cost but also allows the borrowers to opt for a longer repayment tenure. However, the existing lender might charge a foreclosure fee during balance transfer. Also, the borrower might have to pay a processing fee and other charges to the lender to whom the loan is being transferred. Therefore, the borrower should check for any personal loan balance transfer offers offered by various lenders before transferring their personal loan. Let us have a look at the several benefits a borrower can avail through Personal Loan Balance Transfer.
Key Benefits of Personal Loan Balance Transfer
Reduced Interest Rate
One of the benefits of Personal Loan Balance Transfer is reduced interest rate. Borrowers transfer their existing personal loans to lenders offering lower interest rates. This reduces their EMI and interest cost, thereby, reducing the overall borrowing cost of the borrower. Therefore, borrowers should compare the interest rates and other offers provided by various lenders before transferring their existing personal loans.
Higher Loan Amount
Some lenders may offer additional loan amount during loan transfer or may offer top-up facility along with Personal Loan Balance Transfer. Thus you get a higher loan amount at a lower interest rate. This provides financial flexibility to the borrowers and they do not have to avail a new loan to fulfil their personal needs.
Longer Repayment Tenure
Lenders consider Personal Loan Balance Transfer as a new loan application. Hence, borrowers have the option of choosing for a longer loan tenure. Longer tenure results in lower EMIs which reduces the overall borrowing cost, thereby, increasing loan affordability.
Better Offers and Services
Most lenders provide various offers on balance transfer facility such as EMI waivers, discount on processing fee, etc. Therefore, borrowers should check for any offers provided by various lenders before transferring their personal loans. They should also visit online financial marketplaces like Paisabazaar and compare the interest rates and other offers provided by various lenders, and opt for a lender offering best offers.
Conclusion
Personal Loan Balance Transfer is one of the best ways to reduce the interest rate and the overall interest cost of a personal loan. However, it is advisable to check for various offers with different lenders before transferring the personal loan to further reduce the loan cost.
