Do you have to meet your loan EMI commitments due to high into the high-interest only way to reduce your existing personal loan EMI burden is by opting for a private loan balance transfer. This option allows you to opt for an individual loan transfer from one bank to another instead of better terms and conditions and lower personal loan interest rates, which help reduce your EMI outgo. It is an appropriate route to consolidate your multiple loans into one. Private loan balance transfer lenders also extend the option to avail of higher loan proceeds over the outstanding balance. This is known as a top-up facility.
Here are situations when a personal loan online or offline transfer makes sense:
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To secure a lower rate of interest
EMI amount majorly consists of 2 components – principal and interest. Thus, if your rate for a personal loan has dropped by over 1 percent during your repayment tenure, opting for a private loan transfer can act as a lucrative deal to meet your loan EMI burden remarkably. If you are in the first half of your loan repayment tenure, opting for a switch can save considerable interest and, consequently, enhance your monthly savings.
To avail of better loan features.
Suppose your monthly income has increased or your mandatory expenses have decreased. In that case, you can choose the transfer option to better personal loan features like lower individual loan interest rates, top-up facility, and customer service, For example, you can shift to a new personal loan lender for shorter repayment tenure to reduce your debt cost. In these cases, however, ensure that you take the help of an online personal loan EMI calculator to estimate the total interest cost savings before you make the switch.
To get additional funds.
Besides offering a lower interest rate, the personal loan balance transfer option also permits you to avail of additional funds. Thus, if your credit score is satisfactory, you can easily help of this facility to borrow additional funds or enhance your repayment tenure to lower your EMI outgo on the previous amount. This way, you can save considerable money on your monthly outgo comfortably.
Ending note
A personal loan balance transfer is a prudent option. The outstanding loan balance of your existing personal loan is transferred to a new lender offering better services and lower interest rates. The facility helps reduce your overall debt burden. Moreover, it also allows you to avail higher funds to meet your financial shortfalls. However, note that as the balance transfer facility is treated as an application for a new personal loan, you must bear charges like processing fees, administrative fees, etc.
