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Personal Loan Balance Transfer to SBI, HDFC, Axis, ICICI Bank, Bajaj

Personal Loan Balance Transfer Offers

Last Updated 03rd Jul 2020

Existing personal loan borrowers should consider Personal Loan Balance Transfer to another bank, if they are paying 0.5% to 1% higher interest rate on current personal loan rates in India or are looking to avail a top up loan. Personal loan balance transfer are available at interest rates starting @10.75%. Check Best Offers

Bank NamePersonal Loan Balance Transfer Rates
HDFC Bank10.75%
Yes Bank11.49%
Citibank11.99%
ICICI Bank13.25%
Tata Capital11.25%

What is Personal Loan Balance Transfer?

The idea of a personal loan balance transfer is inspired by the facility of transferring the outstanding balance from one provider to another in case of credit cards. Similarly, personal loan balance transfer allows the outstanding balance of the personal loan to be transferred from the current lender to another lender who is providing a lower rate of interest. You need to carefully evaluate the offer of balance transfer and choose the one who is providing maximum saving on the interest payable.

Personal loan balance transfers do not require any collateral from the borrower. However, the current lender may charge some foreclosure charges, and the new lender would charge some processing fee along with stamp duty for the loan agreement, in case applicable. Include these costs too, while evaluating the best balance transfer offer.

Benefits of Balance Transfer of Personal Loan

Balance Transfer of personal loan entails multiple benefits to the borrowers, which include

  • You get lowest interest on personal loan balance transfer starting @ 10.75%
  • You can reduce your EMI outgo by 5 – 8% by transferring personal loan
  • You can also avail top up loan to pay down high cost credit card dues or meet any other personal expenses such as travel, vacation, medical, marriage or even purchasing a car
  • You can get quick personal loans of up to 5 years with minimal documentation and without any guarantor

Savings on Balance Transfer

Suppose, you have an existing personal loan outstanding amount of ₹ 2 Lakh for a tenure of 48 months. You can transfer your existing personal loan to a new bank at lowest rates. By transferring a 4 year personal loan of ₹ 2 Lakh from 14.5% to 10.75%, your EMI can reduce from ₹ 5,516 to ₹ 5,145. Total savings on interest after balance transfer is ₹ 17,795.

Illustration of Interest Savings with Balance Transfer

Existing Loan New Loan
Balance Outstanding₹ 2 Lakh₹ 2 Lakh
Rate of Interest (ROI)14.5%10.75%
Loan Tenure Remaining (months)4848
EMI₹ 5,516 ₹ 5,145
Monthly Reduction in EMI ₹ 371
Total Savings ₹ 17,795

What are the eligibility criteria for a personal loan transfer to a new lender?

  • Applicant must have a running personal loan from another bank
  • Loan amount being transferred should be at least ₹ 50,000
  • Clean EMI payment track record of at least 12 months
  • CIBIL Score required as per bank policy, typically 700 and above

Personal Loan Balance Transfer Process

Follow the below simple steps on how to transfer your personal loan from bank to another

  • Check the current rate on personal loan that you can get and calculate interest savings
  • Calculate the estimated cost of loan transfer on account of various fees and charges. Calculate net benefits and decide if you want to transfer your loan or not. Shortlist new banks that you wish to transfer your existing loan to. Compare and check their interest rate offers, your loan amount eligibilty and their loan process
  • In case you decide to go ahead with the transfer , Apply for a NOC and foreclosure letter from your existing bank
  • Apply for loan at new bank, submit your loan documents with complete repayment record
  • Obtain sanction letter and execute new loan agreement with the new bank
  • Take disbursement from new bank by way of cheque/ demand draft in favor of existing bank and deposit the same with the existing bank
  • On receipt of loan outstanding, your existing bank will cancel all the cheques and ECS and close your loan account

Personal Loan Transfer Charges

Charges to transfer your personal loan can be different depending on your existing bank and the new bank. Key charges for loan transfer include foreclosure charges to be paid to your existing bank and processing fees.

  • Foreclosure charges are payable to existing bank for take over of personal loans. These rates can vary bank to bank from nil to up to 2%.
  • Processing fees are payable to the new bank on transfer and may range from a flat fee ₹ 999 to up to 2% of the loan amount. However, banks offer discount on processing fees from time to time and you should check for attractive offers with marketplaces like MyLoanCare to get best personal loan balance transfer offer.

Personal Loan Balance Transfer Calculator

With MyLoanCare Personal Loan Balance Transfer Calculator, you can calculate your loan amount eligibility and also identify offers with lower personal loan rates compared to your existing personal loan rates. Do complete market research before you choose the bank to transfer your loan to and apply for a balance transfer in terms of current interest rates, processing fees offers, personal loan top up schemes from various banks.

Documents Required for Personal Loan Transfer

  • Filled application form with passport size photograph duly sighed
  • Identity and age proof (PAN card/ passport, driving license/ Aadhaar card/ voter id card)
  • Address proof (Electricity bill/ telephone bill/ Aadhaar card/ rent agreement)
  • Last 3 months salary slip, and last 6 months bank account statement
  • Personal loan statement of loan to be transferred

FAQs

Who can avail the balance transfer and top-up of personal loan?

Any borrower with an existing personal loan on which he or she has paid at least 12 EMI’s regularly are eligible to balance transfer their loan to another bank and also avail top up loans at the time of loan transfer.

When should I avail the personal loan balance transfer?

In case you are paying an interest rate on your personal loan which is higher than those available in the market and the difference is more than 0.5% to 1%, you should consider the option of transferring your loan to a new bank.

What is the time duration for transfer of loan?

Your loan transfer formalities like getting NOC, foreclosure letter, applying and getting a sanction from new bank and getting the loan balance transferred to new bank can take up to 4-8 days.

Do I have to submit any security or collateral for personal loan transfer?

No, there is no need for security or collateral for personal loan transfer.

What is the loan tenure for the balance transfer of personal loan?

The repayment period for loan is around 12 to 60 months i.e. 1-5 years.

What are charges on the transfer of loan?

Apart from rate of interest, other charges include:

  • Processing fee payable to new bank
  • Pre-payment or foreclosure fee payable to existing bank
  • Stamp duty on loan agreement in some states

Personal Loan News - Jul 2020
  • 2020-07-03 : Bank credit soars by 6.18% and deposits by 11% news
    RBI reported that the Bank credit backed by retail loans like home, personal, car, two-wheeler, gold loans along with business loans and mudra loans grew by 6.18% in the fortnight ending 19 June. Further, the deposits backed by Fixed deposits and Recurring deposits grew by 11%.
  • 2020-07-02 : ICICI Bank introduced instant loan facility against mutual funds news
    ICICI Bank has introduced Insta Loans against Mutual Funds in partnership with Computer Age Management Services. The credit will be availed against a wide range of debt and equity schemes of mutual funds. The loan will be paperless and amount upto Rs. 1 crore can be availed under this facility.
  • 2020-06-30 : HDFC Bank launches app for farmers
    HDFC Bank introduced a new app for the farmers. The new app is introduced to assist the farmers and ease the banking experience.
  • 2020-06-30 : Central Bank of India Q4 loss narrowed
    Central bank of India reported narrowing of loss to Rs 1,529.07 crore for March quarter 2019-20 as provisions for bad loans declined. The bank reported a loss of Rs 2,477.41 crore in January-March, 2018-19. Total income backed by the retail loan like home, personal, gold, two-wheeler, car along with business and mudra loan, grew to Rs 6,723.73 crore in the three months to March.
  • 2020-06-30 : Punjab and Sind Bank Q4 loss widens
    Punjab and Sind Bank reported widening of loss to Rs 236.30 crore for the fourth quarter of 2019-20 as provisions for bad loans rose. The public sector bank had posted a loss of Rs 58.57 crore in January-March, 2018-19. During the quarter, the bank backed by the retail loan like home, personal, gold, two-wheeler, car along with business and mudra loan, earned an operating profit of Rs 429.75 crore as against Rs 404.13 crore in the same period of the previous fiscal.
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More