The most opted facility during times of emergency is a personal loan. The amount is directly credited into your bank account and so it is used to cover financial requirements. The ease of availability has surged the disbursement of personal loans in India.
The personal loan balance transfer facility is majorly opted to reduce the interest burden. Many financial institutions in India have adopted this facility so, let us understand if a balance transfer is right for you or not.
Basics
The remaining balance of the loan amount when transferred to another lender is termed loan balance transfer. This concept is popularly known as loan refinancing. The major benefit that borrowers enjoy is a lower interest rate than the previous lender.
Borrowers need to submit the same documents to the new lender and post verification another loan account with the new lender is opened.
Also, borrowers are advised to transfer the balance during the initial few months. Because there are two components of every loan: principal and interest payments. Suppose if your loan tenor is five years and after three years you decide to get your loan refinanced. Till then you would have cleared a chunk of your interest payment and only the principal amount would be left.
Is Transferring the Balance Right for You?
Before applying, borrowers should ensure that they are getting the benefit of low-interest rates. The personal loan interest rates are higher and if the difference is 0.5% or more, go for it. You will save a good amount every month.
Also, remember to not apply if you have already cleared the majority of the EMI payments. In this case, you could incur costs rather than saving money.
You can save your time by approaching lenders like Bajaj Finserv. They offer speedy approvals, lower interest rates, and pre-approved offers. You can check the availability by filling up the information form.
