Personal loans are an excellent way of meeting out financial emergencies. They can be used for various purposes like wedding, travel, medical expenses, home renovation, education etc. They are unsecured in nature and that is why the lender charges a higher interest rate over the amount. The personal loan tends to be difficult over a period of time as a big chunk goes as monthly instalment. But, there is a solution to reduce the monthly EMIs by transferring the current personal loan at a lower rate of interest with new terms and conditions. This is known as a personal loan balance transfer. The low-interest personal loan offer is a great attraction for everyone struggling with reducing outstanding debts.
A loan balance transfer is beneficial in more ways than one. Here are some benefits which are associated with it:
BENEFITS OF PERSONAL
LOAN BALANCE TRANSFER
- LOWER RATE OF INTEREST
Instead of feeling burdened and pressurised under your present personal loan EMIs, it is better to shift your existing loan to other bank or financial institution which has a better rate of interest. But it is highly imperative to take all the factors into consideration before making the plunge. Proper calculations should be done in terms of processing fees and other charges so that you don’t end up paying more in the end. Comparing lenders at LoansJagat helps you to get a better deal with lower interest rate and loan tenure.
- REDUCTION IN LOAN TENURE
Personal Loan Balance Transfer gives you the same or lower loan tenure which means you will be free of all the debts early. Long term monthly instalments can extract all the essence from your monthly income and make you burdened. With a reduction in loan tenure, you can rest assured of relief early.
- BETTER AND IMPROVED CREDIT SCORE
A personal loan can greatly affect your credit score. If done right with proper research, a personal loan balance transfer to a financial institution offering a lower interest rate can enhance your credit score rating. This, however, is case specific and depends on the offer you buy. Thus, choosing the right deal which is beneficial in the long run is important.
Read More: 5 Plans Where You Need Personal Loans
IMPORTANT THINGS TO KEEP IN MIND
As you transfer your personal loan to a new bank or financial institution, you are committing yourself to the terms and conditions of the new service provider. The lock-in period of the loan will be reset again and you will be bounded to the new lender for the loan tenure. Therefore, it is important that you do your homework about the current loan situation and new loan and compares both to make the decision if the transfer is all worth it or not.
With low-interest personal loan offer, the rate of interest decreases but the borrower has to pay additional processing charges and fee equalling to about 1-2% of the loan amount along with other charges. Thus it is always better to compare to avoid taking a hasty decision.
CONCLUSION
A personal loan balance transfer is a great move as per the experts provided all the calculations and terms and conditions are taken care of. If done correctly, it helps considerably in bettering the credit score and easing out the burden of the loan. If in the end, you are saving money then the balance transfer is the best thing to do.
LoansJagat provides a transparent platform where one can compare the rate of interest offered and terms and conditions of different lenders under one roof. They also help in getting your personal loan application approved quickly. Their representatives guide you and help you in comparing the various terms and conditions and calculate whether a personal loan balance transfer is a good move or not by taking into account the various processing charges and fees.
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