Frequently Asked Questions
Q.What is Balance Transfer?
A.It is the total unpaid amount of your existing personal loan transferred to another bank, which is offering a lower interest rate. In simple terms, now you just have to pay your EMIs to the bank you've transferred your loan to, at the new (and lower) interest rate.
Q.When should I consider a personal loan balance transfer?
A.You should consider a personal loan balance transfer when
- The interest rate of your loan is higher than current market rates;
- Your loan has a floating rate of interest and you want to reduce risk by opting for a fixed rate of interest; or
- You want to lower your EMIs.
Q.Is it possible to balance transfer my current loan to a different bank?
A.Yes, it is possible to do a balance transfer of your loan from the current bank/NBFC to another financial institution if you have paid 6 EMIs in the past on the loan without any delinquencies. However, the criteria for such varies from one financial institution to another.
Q.When should I not transfer my personal loan?
A.You should not transfer your personal loan when your current bank has a prepayment penalty which exceeds the amount you save on your interest payments. Check out our Personal Loan Balance Transfer Calculator to find out your savings on your current loan. For your convenience, we have taken into consideration the prepayment fee as well, hence, a positive figure would result in savings.
Q.Will my refinance be affected by a prepayment penalty?
A.Most banks these days do not impose a prepayment penalty. If your bank asks for it, then you can request your new lending bank to take it into account. However, prepayment penalty depends entirely on case to case basis.
Q.Will the bank I transfer my personal loan to consider my eligibility evaluation done by the previous bank?
A.No. Any bank you transfer your current personal loan to, will judge your eligibility based on your current application.
Q.How much time will a bank take to transfer my loan?
A.It might take 2-4 days for the loan to get transferred because the personal loan transfer process is repeated all over again by the new bank which the loan is transferred to.
Q.If my credit rating has dropped since I got the primary loan, will it affect my loan transfer?
A.Yes, a lower credit rating will impact your chances of loan transfer negatively.
Q.When I transfer my personal loan, will income tax deduction certificates be issued by the bank in the name of all co-applicants of the primary loan?
A.As per Income Tax rules, only one certificate is issued for a Personal Loan hence one certificate will be issued which will have the names of all the applicants.
Q.If my credit rating has dropped since I got the primary loan, will it affect my loan transfer?
A.Yes, a lower credit rating will impact your chances of loan transfer negatively as the new bank you transfer the loan to start the loan approval process from the beginning.