Instant Personal Loan Balance Transfer
A personal loan balance transfer is a quick solution to reduce the financial burden and make the repayment more manageable. It provides borrowers with the chance to carry on with their loan repayment schedule with better interest rates and borrowing terms.
Last Updated: 19 May 2025
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Personal Loan Balance Transfer EMI Calculator
How Personal Loan Balance Transfer Works
A personal balance transfer loan allows borrowers to shift their existing loan from one lender to another. Loans are highly useful tools, providing the financial assistance required in the time of need. When opting for a loan, a borrower carefully compares interest rates and tenures and, finally, selects an EMI amount that works best for them. After a while, the borrower may find better rates and more favourable terms from another lender. A personal loan transfer facility enables the borrower to take advantage of better loan terms and move their remaining repayable amount to the new borrower.
Since there is no collateral or asset involved, the guide on how balance transfer works in personal loan is hassle-free.
The first step of a personal loan transfer from one bank to another is to confirm the eligibility of the borrower at the new bank. This is followed by the form submission and documentation. Once all formalities are done, the new bank pays off the remaining loan to the old bank. For a balance transfer loan meaning the foreclosure of an existing loan, some banks may charge a particular fee — a percentage of the outstanding balance. In that case, the fee will be added to the entire repayment sum. With the previous loan settled and the account closed, the borrower now continues with the new payment schedule at the new bank.
Features & Benefits of Personal Loan Balance Transfer
Lower Interest Rates
A significant benefit of opting to transfer personal loan from one bank to another is the potential of availing a lower interest rate. Securing a new loan at a lower rate reduces the EMIs and greatly brings down the overall borrowing cost. Securing the lowest interest rate at the market is often the primary focus to keep the total repayment amount as low as possible. When there are lower interest rates available in the market, existing borrowers cannot benefit from it. However, a personal loan balance transfer lowest interest rate allows it.
More Flexible Tenure
The tenure of the personal loan ranges from a few months to several years. Longer tenures can help make the EMI amount more bearable, but it can also be more expensive since the borrowers pay interest for a longer period. Borrowers can reduce their tenure with a balance transfer personal loan to another bank. It also works the other way around - borrowers can extend their tenure to reduce their monthly obligations.
Improved Loan Terms
In addition to interest rates, personal loans can incur other charges, including processing fees, late payment fees, and prepayment or foreclosure penalties. These charges are a few per cent of the outstanding loan balance but can add up to the total borrowing expense. A personal loan balance transfer can provide access to lower charges. Some banks may not charge any fee on processing and prepayment, which significantly improves the finances.
Debt Consolidation
Multiple lines of loan or credit mean different rates of interest, several EMIs every month, and, overall, a complex repayment schedule. A personal loan balance transfer helps borrowers consolidate their debt and combine their total repayment balance under one medium. This way, loan management is easier.
Eligibility Criteria for Personal Loan Balance Transfer
What is balance transfer personal loan? It starts with closing the existing loan account and opening a new line of credit. Banks mostly allow loan foreclosure, making the first part of the loan transfer easy. The successful transfer depends on the borrower meeting the eligibility criteria of the new bank and getting approval.
- Age: Banks may have varied age criteria for loan applicants. In general, the eligible age range is between 21 years and 58 years. While the age eligibility criteria stand, the influence on loan application evaluation can differ. For instance, a loan applicant nearing retirement age can face more rigid terms than others due to uncertainty around their source of income. In contrast, a 21-year-old or so borrower can face difficulty due to the lack of a sufficient credit history.
- Monthly Income: A stable source of income is compulsory to be eligible for personal loan balance transfer. However, lenders can set different income requirements for their applicants. For instance, a bank may have set the minimum income requirement at INR 15,000 whereas another bank at INR 25,000.
- Employment: The type and place of employment play a crucial role in the personal loan application evaluation process. Salaried individuals are preferred over self-employed applicants as the former has a steady income source. Lenders consider government employees more reliable borrowers than applicants employed in the private sector for the job security the former enjoy.
- Credit Score: It applies, regardless of the lender – a high credit score improves the chances of approval. In general, a score of 750 or above gives a good chance of personal loan approval. Any applicant with lower credit scores may get access to personal loans, but they will be charged a higher interest rate and less amicable terms.
Documents Required for a Personal Loan Balance Transfer
After understanding how to transfer loan from one bank to another, you will need to approach your current bank to initiate a foreclosure and submit the following documents at the new bank along with your application.
- KYC Documents: Refers to proof of identity and address, like Aadhar Card and PAN Card
- Bank Statements: The bank statements for the last three months
- Salary Slip: Salary slips for the last three months
How to Apply for a Personal Loan Balance Transfer
Which Banks to Prefer for Personal Loan Balance Transfer
Here’s a list of the banks offering the personal loan transfer facility for a quick comparison:
Bank |
Interest Rate |
Processing Fee |
Tenure |
|---|---|---|---|
| HDFC Bank | 10.85% - 24% | INR 6,500 | Up to 6 Years |
| Axis Bank | 11.1% - 22% | Up to 2% | Up to 5 Years |
| Kotak Mahindra Bank | 10.99% - 16.9% | Up to 5% | Up to 6 Years |
| IDFC FIRST Bank | 10.99% - 23.99% | Up to 2% | Up to 5 Years |
| ICICI Bank | 10.85% - 16.65% | Up to 2% | 1 - 6 Years |
| Yes Bank | 11.25% - 21% | 0% - 2.5% | Up to 5 Years |
| Tata Capital Limited | 11.99% - 35% | Up to 4% | Up to 7 Years |
| Federal Bank | 12% - 22.5% | 1.5% - 2.5% | 1 - 4 Years | RBL Bank | 18% - 26% | Up to 2% | Up to 3 Years |
Personal Loan Balance Transfer EMI Calculator
Accurate EMI calculation is essential in loan and overall finance management. A personal loan balance transfer calculator is a digital tool that will aid willing borrowers in computing the exact EMI.
Enter basic details, like the loan amount, interest rate, and tenure in months, and the calculator will show you the EMI amount along with the total repayment amount, including the principal and interest. Calculator and compare EMIs with different interest rates and tenures to determine the most suitable loan option and repayment plan for you.
Personal Loan Balance Transfer FAQs
Can I transfer my personal loan if my credit score is poor?
You can transfer your personal loan even if you have a poor credit score. However, a low credit score reduces your trustworthiness as a borrower. The number of options can be limited as only a few lenders offer loans with low credit scores. You will be charged a high rate of interest and other charges and terms can also be less favourable.
How long does it take to complete the personal loan balance transfer?
The personal loan balance transfer duration can vary from one bank to another, taking a few days to a week. My Mudra has streamlined the personal loan balance transfer to make it quick and convenient.
Can I apply for the top-up loan as well as the balance transfer?
Yes, you can apply for a top-up loan along with the balance transfer. It will give you access to a higher loan amount at lower interest rates.
Will paying off my personal loan boost my credit score?
Paying off personal loans within the respective tenure shows disciplined borrowing habits and increases your trustworthiness. It is recorded in your credit history and will give a boost to your credit score.
What is the minimum requirement of outstanding balance for a balance transfer?
Typically, a minimum of INR 50,000 outstanding balance is required to be eligible for a balance transfer. However, lenders can have different criteria.
