There may be times when you find lucrative offers on a Personal Loan but you already have an existing personal loan. In that case, you can transfer your personal loan balance with another bank which offers you a better deal. This transfer of personal loan account from one bank to another bank is called Personal Loan Balance Transfer.
But like it is said that the ‘grass is always greener on the other side’, you should evaluate the other offer fairly in order to make the best judgment.
Before we get started, let’s check out what actually could be the lucrative offer that could make you want to transfer the personal loan balance.
Main Reasons for Personal Loan Balance Transfer
- Lower Interest Rate:
Sometimes banks offer a lucrative interest rate which is lower than the current interest rate that your bank is offering. It could be due to your higher credit score or improved financial status etc.
- Better Service:
Some banks offer premium and better services as an additional customer service, which could be one of the reasons to transfer personal loan balance. Also, it could be that you are unhappy with the services of your current bank due to which you may want to shift.
- Get a top-up:
While taking a Personal Loan Balance Transfer, the banks may offer additional top-up balance, which means increased amount on the existing loan. With this, you won’t have to apply for an additional loan and can enjoy some extra money on the existing T&C.
These are some of the reasons which might lure you to transfer your personal loan balance account. But do not rush, consider the following given factors and evaluate the offers smartly. At times, the offer may seem beneficial but when you look closely you may not find it worthy enough.
Factors to consider before taking Personal Loan Balance Transfer
- Evaluate revised EMI
It may be that you see an attractive interest rate offer which might lower your EMI. But check whether it comes with extension of the tenure of the loan. If it does then you need check the overall impact on your EMI, as you might end up paying more than what you were paying for the original loan.
- Impact of Processing Fees and other charges
While transferring the loan account from one bank to another you may be charged processing fees which may be charged by the old bank or the new bank depending upon the bank policies. It is charged for the closure of the old loan account. Since, it is an additional cost, you need to account for the processing charges and calculate its overall impact on the loan repayment.
- Check terms and conditions
Sometimes there are some hidden terms and conditions in the offer. ALWAYS READ THE FINE PRINT CAREFULLY, to rule out any possible conditions that may be detrimental to your interest. Always check it all carefully.
- Evaluate the frills offer
Just like you see in daily care products, offers like Buy 1 Get 1, or Buy 1 and get 50% discount on another product, banks may offer you additional policies or services to convince you. Don’t get lured by such offers. Evaluate them and check whether you actually need them or not. Sometimes these services may not be of use to you, so always check whether the frills offer are actually beneficial to you or not.
- Other important details
While transferring the personal loan balance, the bank may ask you to open a savings account with the bank for easy processing. In such cases, if you transfer your personal loan to a bank where you already have a bank account, you may find it more convenient, since you are already well-versed with the services and workings of the bank.
While Personal Loan Balance Transfer is a great option if it is beneficial for you. But always remember not to rush for any offer that looks lucrative. Take your time, be smart, evaluate the proposition carefully and then make the best judgment.
We hope it helps!