Frequently Asked Questions
What is Balance Transfer?
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.
How would I know whether it is right for me?
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.
Is it going to help me save more money?
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.
Will balance transfer help me to improve my credit score?
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.
How much time it takes to process balance transfer?
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.
Do I have to activate my credit card account for balance transfer?
Yes, you need to have an activated credit card account then only the balance transfer can happen.
When should I consider transferring my home loan?
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.
Is there any possibility that I can get more money when transferring my existing loan?
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.
What are the documents I would require to submit for balance transfer?
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)
Is it possible to merge two of my existing loans through balance transfer?
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.