How to transfer Personal loan from one bank to another bank?

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.

Loan Amount

Current Bank

New Bank

5 Lakh Interest Rate Interest Rate Interest Rate
15.00 13.50% 12.75%
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

  1. Interest Rates– Which can save you most – i.e. Which other bank is offering lowest
  2. Processing Fee– The lowest fee, as this is one time fee.
  3. Foreclosure Charges

How to transfer Personal loan

  1. Apply at the new Bank for Balance transfer
  2. Once approved – go to existing Bank and inform your decision.
  3. Coordinate between the New Bank and the current Bank, so that money is transferred and new agreements are signed.
  4. Ensure all rights of the earlier Bank on property and other documents are returned.
  5. 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.
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Top Personal Loan Banks in India
ICICI Bank Personal loan 10.99 – 16.50%
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