Took out a loan but worried about paying hefty interest? Found a lower-interest loan scheme with better terms after already availing of a loan? Despite making efforts to choose the best loan product, sometimes, a better scheme lands in the market soon after. A balance transfer calculates your outstanding loan amount and transfers it to another lender.
How does a loan balance transfer work?
A loan balance transfer shifts your unpaid loan amount to another lender to buy you more time to pay the EMIs. A balance transfer enables you to shift lending institutions if you are dissatisfied with the interest rates or the customer service.
Eligibility criteria for a loan balance transfer
- You must have an ongoing loan to avail of the loan balance transfer facility. It can be a personal loan or a home loan.
- You must have paid at least 12 EMIs without a gap to establish yourself as a reliable borrower.
- An excellent credit repayment history, with a CIBIL score between 600 to 750 would prove your creditworthiness to the new lender.
- Your outstanding loan amount must be above INR 50,000 to do a loan balance transfer.
What is a balance transfer EMI calculator?
A balance transfer EMI calculator is an automatic tool that allows you to calculate the possible savings that you would get after transferring the outstanding loan amount from one lending institution to another. Use a balance transfer EMI calculator to ascertain if you will make a significant profit and if it is worth it to pay the processing fees and foreclosure charges to avail of lower interest rates elsewhere. These calculators are available online for free.
How to use the balance transfer EMI calculator?
To use the balance transfer EMI calculator to check if you will save money, follow the steps:
- Go to the official website of the lending institution that offers easy and accessible balance transfer EMI calculators.
- Specify the name of your existing lender, loan amount, tenure, interest rates, and location of the property in the necessary columns.
- Next, input the outstanding loan amount, the amount of interest that you have already paid, and the remaining repayment period.
- The final step is to enter the interest rate, name, repayment tenure, and loan amount of the lender to where you want to shift your outstanding balance.
- Click on ‘apply.’ The balance transfer EMI calculators will do the math and tell you if doing a balance transfer is worth it or not.
When to do a loan balance transfer?
Home loans have a longer tenure, lasting for 15 to 20 years on average. If your income has fluctuated in recent years and you are unable to keep up with paying your old lender’s interest rates, it is time to do a loan balance transfer.
If you have found a great deal with lower interest rates from another lending firm, do not hesitate to do a loan balance transfer. Make sure to check the processing fees and charges with a balance EMI transfer calculator to ensure that you are making a profit.
If you have multiple ongoing loans, you can avail of this loan balance transfer facility to reduce your financial burden. Use the new loan amount to pay off all your existing loans, so you have only one EMI to pay off every month.
You must never be hasty when doing a home loan balance transfer or personal loan transfer. If your bank charges hefty processing fees and foreclosure charges, you will end up using up a huge chunk of your savings or investments to do a balance transfer. It completely negates the purpose of doing a balance transfer in the first place. Always use a balance transfer EMI calculator to check if the processing charges are manageable and if you have enough credit and income to pay the monthly EMIs.
Reach out to ApnaPaisa, the digital forum of one of the best lending institutions in the country. They offer an easy and accessible balance transfer EMI calculator on their platform. You can also consult one of their experienced finance professionals to evaluate your income and credit score to see if you are fit to do a balance transfer.