What is Personal Loan Transfer - Interest Rate, Calculator
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What is Personal Loan Transfer - Interest Rate, Calculator

What is Personal Loan Transfer - Interest Rate, Calculator

posted on 2020-05-08 16:54:29 by Admin

What is Personal Loan Transfer - Interest Rate, Calculator

Loan Transferis a transfer of the outstanding loan to the other bank at a lower interest rate. The transfer of loan facilities can be used for a personal loan, home loan, car loan, etc. The benefit of the transfer of personal loans is the lower interest rate by the other bank or NBFC. Along with that applicants must process fees and foreclosure amounts. It is advisable to compare the cost of previous and new loans. For more information, check out the details below.

What is Personal Loan Transfer?

Applicants planning to transfer the personal loan must check the interest rate that is offered by other banks. If the rate is low, then apply for loan transfer as per the formalities of the bank.

 

 Bank 

 Rates (Onwards)

 HDFC

 10.75%

 ICICI

 11.25%

 Bajaj Finserv

 12.99%

 TATA Capital

 10.99%

 Axis Bank

 12%

 SBI

 10.35%

Benefits of Personal Loan Transfer

A borrower can always get an advantage of a lower interest rate to reduce its monthly EMI burden. Apart from that, other features that make loan liability transfer from one bank to another are as follows.

Interest Rate 

You need to use this product only when another bank is offering a lower interest rate on the current loan. So, after getting such an option, the interest rate on loan current reduces. Hence, benefits the borrower as he/she now has to pay low EMI on the same loan. 

Repayment Period

The repayment period of Loan Transfer is generally 1 to 5 years. The EMI will depend upon the repayment period as offered by the different banks. If the tenure increases you will need to pay low EMIs for a longer period or high EMIs for the shorter tenure. A borrower can negotiate the loan repayment period with the bank as per the requirement.

Better Service Option

In case you are not satisfied with the current loan service. Then, you can always move to another bank. The better interest rate and repayment period will help to ease the burden of existing unsatisfactory service. 

Bonus Features

Customers having a good repayment history and CIBIL score can avail additional benefits from the new bank. Some banks offer lower interest rates, zero processing fees, waivers of last EMI, etc.

Top-Up Loan Facility

Some banks or NBFC offer top-up loans. So, a borrower in case of extra credits requirement can change its bank. So, if a customer is ready to transfer its outstanding loan, then financial institutions offer such loans at attractive rates. In such a scenario, the money is transferred to the previous lender and the fresh loan is credited to the borrower's account.

Personal Loan Transfer Service Eligibility Criteria

Since you are considering transferring your loan, let's check what are the criterions you must fulfill. The customers’ credit worthiness and ability to repay the loan is the most important factor that any financial institution will check.

● CIBIL Score of more than 700.

● Minimum Outstanding Loan must be INR 50,000.

● Clean EMI Repayment records of the previous loans.

Important Documents

Once you are eligible for personal loan transfer, you can apply for it with all the necessary documents. To avoid hassle later, keep the hard and scanned documents with you for an easy application process. The exact document requirement may vary from bank to bank.

The customer must upload or submit the original documents. It will help the bank to check the creditworthiness. Hence, it will help to process loans as soon as possible.

 

Important Documents for Loan Transfer

Completely Filled Application Form

Identity Proof

Age Proof

PAN Card

Address Proof

 Additional Document for Salaried Employee

 Additional Document for Self - Employed

 Last 3 Months Salary Slip

 GST Number

 Last 6 Month Bank Statement

 Last 6 Months Balance Sheet

 Statement of previous Loan

 Last 6 Month Bank Statement

 

 Statement of previous Loan

How to Transfer Loan - 7 Step Guide

Once you have planned to transfer the loan, you must check out the interest rate by other banks. If any financial institute is offering fewer rates, then calculate your interest savings.

1. Calculate the interest rate savings and other additional charges that need to be paid as a processing fee. Then compare if you want to continue the previous or go for the new one.

2. Don't go for only one lender, check the rates of multiple financial institutions. Apart from interest rates, look at processing fees or any other fee.

3. Once you decide the best new lender. Apply for a No-Objection certificate from the previous lender.

4. Thereafter, apply for a loan with the new lender and then fill the application form.

5. Submit or upload all the necessary documents. Complete all the formalities as communicated by the new lender.

6. After all the processing of documents, the loan amount is disbursed to the borrowers' accounts.

7. Meanwhile, the loan account on the previous lender account will be closed.

What are the Charges Applicable for Personal Loan Transfer?

Since you are transferring your loan from one bank to another, charges are applicable for both banks. The previous lender will charge on the outstanding loan amount. Whereas, the new lender will charge the processing fee. So, in banking terms these terms are common.

● Processing Fee- This is the fee applicable for the processing of a new loan. The amount may vary from Rs 500 to 4% of the loan amount.

● Foreclosure Amount- This is the amount charged by the previous lender. Since you are transferring your loan to another bank, it also requires paperwork and other processing. So, charges generally go from 0 to 4% of the outstanding amount. Some banks also apply flat charges as per the bank policy.

 

What

 

Personal Loan Transfer Calculator

To avail of this facility, it is important to compare the cost of the previous and the new loan. There are many online tools available to calculate the personal loan transfer EMIs.

To give an idea, consider that you have 2 Lacs outstanding loan with a 24 months repayment period.

 

 

 Old Loan 

 New Loan

 Amount

 INR 2,00,000

 INR 2,00,000

 Repayment Period

 24 months

 24 months

 Interest Rate

 13.75%

 10.75%

 EMI (Monthly)

 INR 9578.97

 INR 9298.27

 Total Interest

 INR 29,895.35

 INR 23, 160.90

 Total Saving

 

 INR 7015.15

 

For more information, please contact the LoanADDa team. Happy to Help!