People apply for personal loans whenever they require cash. Most top lenders in the country are happy to sanction it to you. However, while the application process is straightforward, the interest rate is often the bothering factor.
One of the effective ways to cut down the interest burden is to use the personal loan bank transfer or refinancing facility. So what is it, and why should you consider it?
Learn more about a personal loan transfer to understand the concept and decide to opt for it if required.
Why should you think of a personal loan balance transfer?
A personal loan balance transfer is when the customer shifts their outstanding personal loan balance from one bank to another. In most cases, people do so when they get a better interest rate offer, i.e., the lender offers a lower personal loan interest rate than the existing lender for the amount due.
In some cases, personal loan transfer from one bank to another also occurs because of the added convenience factor. For example, the new lender offers a longer tenure, improved repayment facilities, better services, or anything else.
Things to consider while opting for a personal loan balance transfer
While balance transfer may seem lucrative initially, it is often better to stick to the current lender. Here are the factors to consider before opting for a personal loan bank transfer –
Change in EMI
Most people prefer personal loan transfer as it allows them to settle down for lower EMI payments. But it would be best if you kept in mind the tenure that the lender offers. If they are extending the term, there is a high chance of you paying more in the long run compared to your existing lender.
Terms and conditions
Before completing the transfer, you must go through the terms and conditions attached by the new lender. Before signing it, ensure that there are no hidden clauses detrimental to your finances. If any clause seems ambiguous, do not shy away from consulting about the same.
Processing and additional fee
When looking for a switch, it would inadvertently involve a processing fee for the new personal loan’s sanction. Ensure that the additional charges you pay do not significantly affect your loan proposal.
Some lenders try to make the switch lucrative for you by offering some freebies. It especially is the case when you undertake a personal loan transfer online. While these offers can seem beneficial, make sure that the benefits are tangible and would be enjoyed by you before making the switch.
Refinancing is a feasible option when you get a better offer than doesn’t dent your finances in the long run. Sometimes it is forced when you are looking for a longer tenure for your existing personal loan. Make sure you go through all the terms and conditions before making the final call.