If you find your interest rates for personal loan is high comparing with other banks, so you can transfer your loan to another bank after checking few points like – Prepayment charges of current bank, Processing Fees of New Bank & How much principal amount is pending in current bank.
Most consumers take this Personal loan on a fixed rate and thus the rates keep changing and its on the mind of the consumer every month. So when you take a Personal loan be prepared to switch this Personal loan between Banks after 6 EMI’s (Locking period by some banks.)
Same Process to be followed for Home Loan transfer from One bank to another.
Its both ethical and a smart decision that a consumer must take if he has a better option available with him. The saving that one can make while switching loans can be huge.
Look at savings you can make if you get a rate waiver for a 5 Lakh Personal loan for 4 Years.
|5 Lakh||Interest Rate||Interest Rate||Interest Rate|
|Details||Rs. 13,915||Rs. 13,538||Rs. 13,352|
|How Much You can save||Rs.377 per EMI
(377 x 48)= Rs. 18096
|Rs.563 per EMI
(563 x 48)= Rs. 27024
Other things to check before making decision to Transfer
- Interest Rates– Which can save you most – i.e. Which other bank is offering lowest
- Processing Fee– The lowest fee, as this is one time fee.
- Foreclosure Charges
How to transfer Personal loan
- Apply at the new Bank for Balance transfer
- Once approved – go to existing Bank and inform your decision.
- Coordinate between the New Bank and the current Bank, so that money is transferred and new agreements are signed.
- Ensure all rights of the earlier Bank on property and other documents are returned.
- The ECS from the account which is paid as Emi to current Bank is stopped and for the new Bank is issued.
The process to shift to a new Bank takes 5-7 days and its easy if your track on the Personal loan is good and you have a good credit history.
So if you have the option- and even if the process takes 1-2 days of your work we recommend that this should be done as it will save you a lot and at least more than the 2 days of work.
- Every consumer after 2-3 years should review rates and shift to a better lender if required.
- A consumer should also approach his own Bank if he feels the rates are higher as sometime the existing Bank on a fear of loosing good customer matches the new Bank rates with nominal one time fee.