When you do not have any arrangement of money, then you can choose the option of personal loan. But one problem with personal loan is that its interest rate is very high. Due to high interest, sometimes it becomes difficult to repay the personal loan.
Personal Loan: Personal loan is a collateral free loan, so it is easy to take it. You do not have to do a lot of formalities to get a personal loan. That is why it is also called an emergency loan. In difficult times when you do not have any arrangement of money, then you can choose the option of personal loan.
But one problem with personal loan is that its interest rate is very high. Due to high interest, sometimes it is difficult to repay the personal loan. If you have also taken a personal loan and are facing problem in repaying it due to high interest, then you can choose the option of balance transfer. This can be a very beneficial deal for you.
Know what is balance transfer?
Balance transfer is a method through which you can transfer your running loan from one bank to another. Most people take this decision to get relief from the increased interest rates of the loan. If your credit score is good, then other banks easily offer you a cheaper loan than the current interest rate. Due to the low interest rate, your EMI also decreases.
What are the other benefits of balance transfer?
The first advantage of balance transfer is to get a better interest rate than the current interest rates on the running loan, so that the burden of EMI can be reduced.
Another advantage of this is that by using the balance transfer facility, you get the opportunity to restructure the loan. In such a situation, the borrower can choose a longer tenure than the remaining tenure of his existing personal loan. The longer tenure also reduces the EMI. However, due to this the borrower may have to pay more interest.
The third benefit is that of a top-up loan. Many banks also offer top-up personal loan facility to those who transfer their existing personal loan. Top-up personal loan enables customers to borrow more money over and above their existing loan.
Fees at the time of balance transfer
There is no need to deposit any collateral in the new bank for personal loan balance transfer. But for this you have to pay foreclosure fees and loan transfer charges to your existing bank. Apart from this, you may have to pay stamp duty along with loan processing fees and other fees to the new bank where you are transferring your loan, which is usually charged while applying for a new personal loan.
