Guide to Transfer Your Personal Loan to Another Financial Institution

Transferring a Personal Loan from one financial institution to another is commonly known as a Personal Loan balance transfer. It is a smart move if you're planning to reduce your high interest loan or take advantage of better service and features. But like any financial decision, it’s important to understand the process and implications. In this blog, you will understand how you can transfer your Personal Loan to another financial institution. Read on!

Steps for Personal Loan Balance Transfer

The steps to apply for a Personal Loan balance transfer are simple. Here is how you can apply for one:

Step 1: Research and Choose a Lender

Search and compare the loan terms or lower interest rate offered by different lenders. Consider factors like eligibility requirements, loan amount, and flexibility of the new loan. 

Step 2: Apply for Balance Transfer

Once you have selected a lender, fill out the application form, and provide all the details that are required by the lender. You must not forget to include the details about your existing loan details.

Step 3: Approval and Loan Transfer

The lender will assess your loan application and if you meet the eligibility criteria, they will approve you balance transfer loan application. Once the loan application gets approved, you sign a new agreement with the lender and the amount will be disbursed to your bank account. 

Step 4: Loan Repayment

Start the loan repayment to the new lender according to the new terms and loan agreement to have agreed upon. 

5 Benefits of Transferring Personal Loan

Transferring your loan can offer several advantages. Here are some benefits you must know: 

1.    Lower Interest Rates
One of the biggest advantages of transferring a Personal Loan is securing a lower interest rate. This can significantly reduce the overall borrowing cost, meaning you pay less interest over the loan tenure. 
2.    Reduced EMI (Equated Monthly Installment)
A lower interest rate often leads to lower monthly payments, which can help ease your financial burden. With reduced EMIs, you’ll have more flexibility in managing other expenses and investments while still repaying your loan comfortably.
3.    Better Loan Terms
Some lenders offer additional benefits when you transfer your loan, such as longer repayment tenure, flexible EMI options, or processing fees. If your current loan has unfavorable terms, switching to a lender with better conditions can improve your financial situation.
4.    Debt Consolidation
If you have multiple loans with different lenders, transferring them to a single lender can help consolidate your debt. This will simplify your repayment, reduce the chances of missing due dates, and make financial management more efficient.
5.    Improved Credit Score
If you transfer your loan to a lender with better repayment terms, it can help you manage payments more efficiently. Regular and timely repayments can boost your credit score over time and improve your chances of securing better financial products in the future.

Things to Consider Before Transferring Your Personal Loan

When transferring your Personal Loan, here are a few things that you must consider: 
•    Ensure that the savings from transferring your Personal Loan balance exceed all related expenses, such as processing fees, prepayment penalties, and foreclosure charges.
•    Select a repayment tenure of your Personal Loan based on EMI affordability. 
•    Check if the new lender requires additional funds for balance transfer.

To Conclude

A Personal Loan balance transfer can be a strategic move if you are seeking better financial management and reduced borrowing costs. By carefully assessing interest rates, repayment terms, and associated fees, you can optimise your loan conditions. However, it’s essential to evaluate associated costs, such as processing fees and prepayment penalties, to ensure that the benefits outweigh the expenses. 
Make your transfer more flexible and efficient with Poonawalla Fincorp’s Personal Loan balance transfer. 

Frequently Asked Questions

1.    Can I consolidate my multiple loans through balance transfer?

Yes, Poonawalla Fincorp allows you to merge multiple Personal Loan through Personal Loan balance transfer facility. 

2.    If I transfer my Personal Loan to another lender, will my EMIs decrease?

Yes, transferring your Personal Loan may reduce your EMI if you get a lower interest rate or extend your tenure.

3.    Can I get a loan top-up while balance transfer?

Yes, with Poonawalla Fincorp you can get a top-up loan on your existing loan when you transfer your balance. The top-up loan will help you with additional funds to meet your urgent needs by refinancing your existing loan.