We always crave for the best deal that offers profits in return. Any service that we opt for, we make sure to look out for lucrative deals. Just like that, you can also get the best deals on your personal loan too. This can be availed by opting for a personal loan balance transfer. In this process of transferring the loan, you can gain some amazing benefits.
Now, we will put this in a simpler way. So, you might be pondering what this transfer is all about and how can a loan be transferred from one bank to another. We will answer every question related to the transfer of the personal loan.
Simply explained, if you already have a loan in one bank where you have been making payments for a few months. Then you find that there is this another bank which is offering the same loan with a much lesser interest rate and better features, you can talk to the lender and apply for a loan transfer option. This is where you can transfer your outstanding loan amount from your present bank to the new bank.
The lender might charge a processing fee for the transfer, which is a one-time payment, but you will end up getting the best deal from the new lender. There is also something that you need to look at, you are required to calculate the overall payment that you had to pay to the present lender and also to the new lender upon transferring (including the transferring fee). If your calculation shows no difference, then there is no point in opting for the loan transfer. So, basically this transfer of loan is opted to gain additional benefits out of it and not to fall in losses.
Now, we will not look at the pros and cons rather we will try and understand the factors that must be considered.
1. Tenure period: This factor in the loan application is one of the most important ones, as this will tell you if you are paying. If you have decided to choose a longer tenure period, you might get a break from paying higher monthly payments but when the overall amount is calculated, you will tend to pay more than the loan amount taken.
So, it is better to choose a shorter tenure period depending on your capacity and pay off the loan earlier than expected. This will give a boost to your financial status and you will get freed up from the debts.
2. Interest rate: We know the main reason you have opted for this option is that you are getting the same loan with a lower interest rate. This will lower the overall EMI that you must pay but consider this idea, only after comparing the interest rates and other charges that the new lender is charging.
3. Processing fee: Do you think this whole process is just so easy, where you have decided to transfer, and you get it done in minutes. No, the process takes time to get transferred and upon that, the new lender will charge processing fee over it. So, you must calculate these extra charges and check if it is beneficial to switch the loan.
4. Top up facility: The new lender will give an additional benefit of topping up your existing loan with a new one in case you need extra money. This is offered only if you have opted for the loan transfer.
5. Total cash outflow: If you are opting for this option only because the new lender is offering a lower interest rate, then you should also look at the total outflow of cash that you are paying.
6. Paying on time: The credit score is something that you must think of. Even after transferring the loan, the first thing the lender will check is the credit score. So, making the payments on time will not only improve the credit score but will also make it easy to transfer the loan.
7. Terms and conditions: After all, how can we miss this aspect of the loan. The above mentioned each factor will be mentioned in the terms and conditions agreement. Every factor must be deeply analyzed beforehand and then sign on the dotted lines.
Based on all these factors, your loan transfer process will get much easier to opt for.