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Personal Loan Balance Transfer

Balance Transfer Personal Loan: Details

Last Updated 20th Jan 2022

  • If you are paying 0.5% to 1% higher interest rate than current personal loan rates, you must consider personal loan balance transfer.
  • Balance transfer on personal loan is available at interest rates starting at 10.25%.Check Best Offers
  • The personal loan balance transfer involves minimal documentation.
Bank NamePersonal Loan Balance Transfer Interest Rates
HDFC Bank 10.25%
Yes Bank 10.70%
ICICI Bank 10.75%
Tata Capital 11.25%
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    Compare Personal Loan Transfer Rates of All Banks

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    Bank Personal Loan Transfer Rates Processing Fee
    SBI Balance Transfer
    Compare
    9.60% Nil
    HDFC Bank Balance Transfer
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    10.25% Upto 2.50% Min ₹ 999
    ICICI Bank Balance Transfer
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    10.75% Upto 2.25% of Loan Amount
    Bajaj Finserv Balance Transfer
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    12.99% Starting from 1.50%, Up to 3%
    IDFC First Bank Balance Transfer
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    10.49% Upto 2.00%
    Axis Bank Balance Transfer
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    10.25% Rs.4,999
    Tata Capital Balance Transfer
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    11.25% Upto 2.50% of Loan Amount
    Fullerton India Balance Transfer
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    11.99% 2%
    IndusInd Bank Balance Transfer
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    10.49% Min 0.75% to Max 1.75%
    Kotak Bank Balance Transfer
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    10.45% Starting from Rs.999
    RBL Bank Balance Transfer
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    13.99% Upto 3.5%
    IIFL Balance Transfer
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    12.99% 2.5%-4%
    HDB Financial Balance Transfer
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    13.99% Upto 3% of Loan Amount
    Syndicate Bank Balance Transfer
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    13.40% 0.5%, Min Rs. 500
    Muthoot Balance Transfer
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    14.00% 2.5-3.5%
    Union Bank of India Balance Transfer
    Compare
    11.00% 0.5%, Min Rs. 500

    Personal Loan Transfer from One Bank to Another

    Personal Loan balance transfer is an option to transfer your personal loan from one bank to another to take advantage of the lower interest rate and get a top-up loan. The two primary reasons to take this loan are saving interest and getting the additional loan on your existing loan amount. The decision to transfer a personal loan to another bank is dependent on how much cost you are paying on your existing loan. For example, if you have taken a personal loan from HDFC Bank and find that SBI is offering a lower interest rate, then transferring it to SBI is a better option.

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

    Features of Personal Loan Balance Transfer

    Special features of this facility and process are :

    • Low rate of interest: With a balance transfer facility, you can avail your existing personal loan with an affordable interest rate. Thereby, you can always reduce the burden of an existing personal loan even when you have availed it at a higher interest rate previously.
    • Flexible repayment tenure: Transferring a personal loan to another bank not only helps you in availing a lower personal loan rate but also helps you in restructuring the repayment tenure. By extending the loan repayment tenure, you can easily reduce your personal loan burden, as the EMI is split over a number of years. Similarly, you can get rid of the personal loan in a shorter period by reducing the loan tenure.
    • Top-up facility: This facility is accompanied by a top-up facility, wherein you can get your loan amount revised in need of extra credit. Various personal loan lenders provide the top-up facility at concessional rates if you avail of the balance transfer facility.
    • Minimal documentation: The personal loan refinance involves minimal documentation. This is because the KYC and verification of the documentation have been done by the previous lender already.

    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 to the new bank.

    • Foreclosure charges are payable to existing banks for the takeover of personal loans. These rates can vary bank to bank from nil to up to 5%.
    • Processing fees are payable to the new bank on transfer and may range from a flat fee ₹ 999 to up to 3% of the loan amount. However, banks offer discounts on processing fees from time to time and you should check for attractive offers with MyLoanCare to get the best personal loan balance transfer offer.
    Bank Foreclosure Charges Processing Fees
    SBI Balance Transfer 3% Nil
    HDFC Bank Balance Transfer 2 - 4% Upto 2.50% Min ₹ 999
    ICICI Bank Balance Transfer 5% Upto 2.25% of Loan Amount
    Bajaj Finserv Balance Transfer 4% Starting from 1.50%, Up to 3%
    IDFC First Bank Balance Transfer 5% foreclosure charges. Can foreclose after 3 months in case of smart personal loan Upto 2.00%
    Axis Bank Balance Transfer For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2% Rs.4,999
    Tata Capital Balance Transfer Rs. 1,000 to Rs. 5,000 Upto 2.50% of Loan Amount
    Fullerton India Balance Transfer 1 -17 months: 7%, 18 - 23 months: 5%, 24 - 35 months: 3%, After 36 months: Nil 2%
    IndusInd Bank Balance Transfer 4% Min 0.75% to Max 1.75%
    Kotak Bank Balance Transfer Starting from Rs.999 Starting from Rs.999
    RBL Bank Balance Transfer 3%-5% Upto 3.5%
    IIFL Balance Transfer 01-06 months-7%+GST, 7-24 months- 5%+GST and After 24 Months-4%+ GST 2.5%-4%
    HDB Financial Balance Transfer Nil foreclosure charges Upto 3% of Loan Amount
    Syndicate Bank Balance Transfer Nil prepayment charges 0.5%, Min Rs. 500
    Muthoot Balance Transfer Nil prepayment charges 2.5-3.5%
    Union Bank of India Balance Transfer Nil prepayment charges 0.5%, Min Rs. 500

    Personal Loan Balance Transfer Process

    The process to transfer your loan from one bank to another is easy and involves the following steps:

    • Identify a low interest rate personal loan offer: First step is to identify the bank which is offering a low rate of interest on personal loan and to which you want to transfer the loan. Calculate your potential interest savings once you get a final rate offer from the bank.
    • Calculate the cost of transfer: The second step is to estimate the cost of loan transfer which primarily includes processing fees and prepayment charges you will have to pay to your existing bank.
    • Calculate your savings: Next, calculate your net benefits or net savings if you opt for transfer by deducting the transfer cost from the potential interest savings. If your potential net benefit is significant, then proceed with the transfer process.
    • Apply for personal loan at new bank: Apply for a quick personal loan at a new bank and submit your loan documents with a complete repayment record.
    • Get NOC from existing bank: In parallel to fourth step, apply for a NOC and foreclosure letter from your existing bank, which must be submitted for loan processing and sanction.
    • Sign loan agreement and get disbursement: Obtain sanction letter and execute new loan agreement with the new bank. Then, take disbursement from the new bank through cheque/ demand draft in favour of the 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.

    What are the Eligibility Criteria to Transfer Personal Loan to a New Lender?

    To transfer your personal loan from one bank to another, you have to meet certain eligibility criteria. The eligibility depends on your repayment capacity to repay the loan and your creditworthiness. Some of the common key criteria are as follows:

    • You should have a running personal loan from another bank.
    • You should have paid a minimum of 12 EMIs.
    • Outstanding Personal Loan amount should be at least ₹ 50,000 for balance transfer process.
    • A clean EMI payment track record of at least 12 months is required for transfer.
    • CIBIL Score required as per bank policy, typically 650 and above.

    Documents Required for Personal Loan Transfer

    • Filled application form with passport size photograph duly signed
    • 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

    Savings on Balance Transfer

    A balance transfer of personal loan is an ideal way to save more on your personal loan EMI, if it is creating a financial burden. This can be better understood with an illustration. 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 interest on personal loan. By transferring a 4 years personal loan of ₹ 2 Lakh from 14.50% to 10.25%, your EMI can reduce from ₹ 5,516 to ₹ 5,072. Total savings on interest after balance transfer is ₹ 21,313.

    Illustration of Interest Savings with Balance Transfer

    Existing Loan New Loan
    Balance Outstanding₹ 2 Lakh₹ 2 Lakh
    Rate of Interest (ROI)14.5%10.25%
    Loan Tenure Remaining (months)4848
    EMI₹ 5,516 ₹ 5,072
    Monthly Reduction in EMI ₹ 444
    Total Savings ₹ 21,313

    Personal Loan Balance Transfer Calculator

    With MyLoanCare Personal Loan Balance Transfer Calculator, you can calculate your loan amount eligibility and identify offers with lower personal loan rates. Do complete market research before you choose the bank to transfer your loan to and apply for a balance transfer by comparing emis and interests payout across top lenders.

    FAQs

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

    If you have an existing personal loan on which you have paid at least 12 EMI’s regularly, you are eligible to balance transfer your loan to another bank and 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.

    How long do personal loan transfers take?

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

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

    No, there is no need for security or collateral for transfer. A Personal loan is an unsecured loan that does not involve any security, and it does not even have any end usage restriction.

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

    The repayment period for a loan is around 12 to 60 months i.e. 1-5 years. However, the repayment tenure for every bank is different. For example, the minimum repayment tenure for HDFC is 12 months and is 6 months.

    What are charges on the transfer of loan?

    Apart from interest rate, other charges include processing fee payable to new bank, pre-payment or foreclosure fee payable to existing bank and stamp duty on loan agreement in some states.

    Is a personal loan balance transfer a good idea?

    Availability of the personal loan balance transfer facility provides a number of benefits such as lower interest rates, flexible repayment tenure, and top-up facility. Apart from that, the facility can help you avail of better customer service if you are not satisfied with the services offered by your current personal loan lender.

    Which Bank is best for a personal loan balance transfer?

    A number of banks offer balance transfer facilities. Amongst all, the lowest balance transfer rate currently of 10.25%, which HDFC Bank offers.

    How do I transfer my personal loan to another bank?

    You can transfer personal loans to another bank by switching to a different lender offering a lower interest rate. This begins by shortlisting the list of banks offering the lower rates than the current lender and further making a comparison on the basis of customer service and other charges such as processing fee, balance transfer fee, etc. On deciding the new lender apply for the balance transfer facility and submit the required documents, including the NOC certificate.

    Can a personal loan be transferred to a home loan?

    No, a personal loan cannot be transferred to a home loan. However, you can transfer personal loans from one bank to another. The facility comes with various benefits like lower interest rate and top up loan.

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