Personal Loan
A personal loan is an amount of money you can borrow to use for various purposes. This facility is offered without any collateral also with fixed rate of interest.
Why Personal loan?
You can choose to opt a personal loan for these reasons:
- Personal Loan for education
- Personal Loan for education
- Personal Loan for wedding
- Personal Loan for vacation
- Personal Loan for debt consolidation
Why Balance Transfer?
Personal loan balance transfer is a process by which a borrower transfers an outstanding principal of a personal loan from one lender to another in order to benefit from better terms such as a lower interest rate on the outstanding loan. Many NBFCs (non-banking financial companies) and banks now provide the option of a balance transfer on personal loans. However, one needs to carefully evaluate the balance transfer offer and choose the one that helps reduce the cost of borrowing.
Personal loan balance transfer does not require any security or collateral to be provided by the borrower. Some nominal charges that may be involved in personal loan balance transfer are foreclosure charges that may be levied by the current lender, processing fees that may
be charged by the new lender and stamp duty on loan agreement, if applicable. The following are some key factors to consider when evaluating a balance transfer offer on personal loans.
Features of Personal Loan Balance Transfer
Personal loan balance transfer comes with an array of features. Some of them are given below:
- Lower Rate of Interest: One of the primary features or benefits of a personal loan balance transfer is that it often offers a better/lower rate of interest. The new lender will usually offer a lower rate of interest on the loan transfer. This results in the borrower’s interest burden being reduced through the reduction in EMIs
- Longer Repayment Tenure: Balance transfer also often enables you renegotiate the loan terms such as getting the new lender to extend your loan repayment tenure. This will reduce the monthly EMI burden. However, it may result in higher total interest payout. Some lenders may also offer you the option to reduce your repayment tenure. Though opting for a short tenure may result in higher monthly EMIs, it may help to reduce the total interest payout of the loan.
- Avail Additional Features: Depending on your past payment record and changing income dynamics, you may get an offer from other lenders for better loan featuress uch as waiver of last EMI, zero processing fees, lower interest rates, etc. The personal loan balance transfer facility can thus not only reduce the personal loan interest burden, but it may also get the borrower a loan with better features.
- Top-up Loan Facility: Many banks allow a top-up loan facility along with personal loan balance transfer. In case the borrower is in need of more credit, one can also consider going for a balance transfer. Many lenders or financial institutions can offer top-up personal loans at a competitive and relatively lower rate of interest, in case one is ready to transfer the outstanding personal loan from the current lender to a different lender of personal loans. There are many lenders who offer personal loan balance transfer and top-up personal loans with minimal documentation and without any hassle. In case of top-up loans, outstanding loan balance is directly paid to the previous lender and the fresh amount of loan will be credited to the borrower’s account.
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