Balance transfer is the process of transferring your existing loan amount to another bank for the better rate of interest. Basically, you are taking a new loan to pay off your previous loan at a lower interest rate, which helps you to save on the EMIs.
Check with the bank, if they are offering you a better interest rate and calculate how much fees they are charging you, then only you’ll be able to calculate the potential of balance transfer.
Most of the time it does help people to save more on their EMIs but it totally depends on whether the bank, you are planning to transfer your loan, offers you better interest rate with less charges or not. If you were making your payment on times and your records were good with your previous bank, then the new bank will consider offering you less interest rate.
It actually helps you to increase your credit score if taken once, but if you are transferring your loan again and again then it can actually make your credit score look bad because bank will think you can’t pay your loan and that’s why you are just transferring your loan frequently for less interest rate.
Well, it depends on your lender but generally it takes around 7 to 10 days. Moreover, it is recommended to apply online as it takes less time.
Yes, you need to have an activated credit card account then only the balance transfer can happen.
It is advisable to switch the loan early if you want to save more because later on you would have already paid out an ample amount of interest.
Yes, borrowing more money at the time of transferring your existing loan is called Top-up. You can apply for top-up along with the balance transfer, thus, you will get more loan and more time to repay it.
Apart from all the financial, KYC and property documents (in case of home loan and LAP), you need to submit few more documents for balance transfer:
-Repayment track of existing loan
-Foreclosure letter (Balance outstanding letter)
Yes, if you have two or three loans altogether and if you are tired of paying so many instalments individually, then balance transfer is the best saviour for you as it can merge them all into one single loan for better interest rate.
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