Today, personal loans are the quickest and most practical type of credit. Its quick approval, fast disbursal, and lack of collateral make it the go-to lending product in times of financial crisis. You can choose a personal loan if you need additional money for non-emergency expenses like house renovation, weddings, schooling, and occasionally even trips. Today’s entrepreneurs frequently choose a personal loan for business purposes as a great financing solution.
In the current financial environment, personal loan top-ups and balance transfers have become extremely popular. Any customer can choose to top up or transfer their balance on a personal loan to eliminate the headaches associated with applying for a loan from another bank or to lessen and realign the loan’s overall burden.
What is a personal loan balance transfer?
The idea behind a personal loan balance transfer is to move an existing loan’s outstanding balance from one financial institution to another. The main reason for the transfer is to get better terms, such as a lower personal loan interest rate. Transferring the balance of a loan is primarily intended to eliminate debt altogether. Moving to a better bank with a lower interest rate for your loan is never too late. Not only that, but you can also get extra money for your requirements whether they are personal or professional.
Eligibility for a personal loan balance transfer
The requirements for qualifying for a personal loan balance transfer differ from lender to lender and are the same as those for a personal loan eligibility requirements. However, the fundamental requirements for qualifying that the majority of lenders check for are listed below:
- Who can avail: Salaried applicants employed in government organizations and private firms.
- Age: 21 years to 60 years
- Work experience: Total 2 years of work experience out of which 1 year should be with the current employer.
Documents required
When transferring personal loans, different lenders may want various papers. However, the most typical documents you need to have with you are
- Passport-sized photographs
- Identity proof
- Address proof
- PAN card
For salaried people
- The last 3 months’ salary slips.
- Last 6 months’ bank statements.
- Loan transferring statement from the present lender.
For self-employed people
- TAN card or GST number.
- Last 3 years balance sheet.
- Profit and loss account statements
- Last 6 months’ current account statements.
- Savings account statement of the applicant.
Process of balance transfer
By doing the steps listed below, you can effortlessly transfer your personal loan from one lender to another:
- Verify the new lender’s offered interest rate, processing charge, and loan term. Checking for balance transfer offers from various lenders is a smart idea, and you should then shortlist the one that best suits your needs.
- Calculate the savings by comparing the new loan offer to your previous loan. Make sure to take into account additional costs like the processing fee for the new loan as well as foreclosure fees (which must be paid to your current lender).
- Once you’ve made the decision to transfer your loan to a new lender, ask your current lender to foreclose on your property and get a NOC (No-Objection Certificate) to that effect.
- Start your application for a balance transfer with the new lender. You must give the new lender the NOC you received from your old lender. Your previous lender will get the outstanding sum from the new lender once the balance transfer procedure is finished. After this, the new lender is due the outstanding balance.
Bottom Line
When requesting a balance transfer for a personal loan, choosing a trustworthy lender is crucial. You now have all the information you require regarding the requirements for transferring your personal loan and how to submit an application for it.
Along with that, picking the appropriate and effective lender is another important consideration before choosing to transfer the balance of a personal loan. The equated monthly installments, loan processing fees, terms and conditions, additional offers, etc. are only a few of the other factors that are involved.
