What’s the first thing that comes to mind when you hear the phrase “personal loan transfer“? If you’re like most people, your thoughts go to the money borrowed. Although it is a concept not known to many, personal loan transfers are helpful for those under huge debt.
How can you apply for a personal loan transfer? Many factors need to be kept in mind when it comes to personal loan transfer, which we will explore in this article. We will also look at how personal loan transfer works in India.
What is a Personal Loan Transfer?
- Personal loan transfer involves the transfer of loan balance from one lender to another. It is undertaken when the borrower chooses not to pay the outstanding loan balance or has been denied a fresh loan, and no alternatives are available.
- Individuals who are unable to repay the full balance of their personal loan will often require a personal loan transfer. If they have met the conditions of repayment, as per the original lender’s terms, it is possible to get an instant approval personal loan faster.
- If the borrower has applied for a new personal loan but was denied due to the existing outstanding balance on their account with the same lender, they can request a private loan transfer. The first step in this process is contacting customer service representatives at both lenders and ensuring that both parties agree to transfer the outstanding balance from one bank account to another.
- It may take anywhere between 10-15 days to know the status of your personal loan transfer application.
How do Personal Loan Transfers Work in India?
Below is a step-by-step guide on how to apply for a personal loan transfer in India:
- Personal loan transfers help you transfer the entire balance of your personal loan from one bank to another. All you need is your account number and IFSC code for both banks, which you can find on your latest bank statement. The entire process takes up to 10 working days.
- If you’re unsure of the amount owed to each bank, speak with their representatives before making a transfer. Otherwise, the interest rate levied on the outstanding loan balance can become expensive. Once everything has been sorted out, the bank will contact the lenders involved, so that they stop debiting any payments from your account.
- Your outstanding debt will be transferred, and you’ll only owe what’s left over, to the new lender. It is worth noting that this process does not affect your credit score and has no impact on your eligibility for other loans or lines of credit. However, some administrative fees might be involved, depending on where you live in India.
What are the Benefits of Personal Loan Transfers in India?
Here are some advantages of personal loan transfers:
- Personal loan transfers are a way to change your lender without closing out your existing loan and starting afresh with a new lender.
- When you transfer a personal loan, all of your original loan terms and conditions remain unchanged.
- The same interest rate, as on the original loan amount will apply, and your schedule for monthly payments won’t change. You’ll be able to retain the same loan amount and interest rate without starting from scratch with a new lender.
- A personal loan transfer is usually free of charge, making it a viable option for people with high outstanding debt. You’ll be able to understand whether or not your new lender offers more favourable terms before anything else changes.
- If you’re interested in transferring your personal loan, you’ll need to contact your current lender about getting a transfer. The process for transferring a loan can vary depending on who your lender is and what type of loan you have. An important point to remember is that personal loan transfers won’t affect your monthly payment schedule or anything else related to your loan.
- If you’re going through a personal financial crisis, such as an unexpected job loss or medical emergency, discuss it with your lender immediately. They should be able to assist you in such cases. Lenders want their customers to be happy, which they will be if lenders help them with paying off debt during difficult times.
What are the Risks Associated With Personal Loan Transfers in India?
Despite its benefits, personal loan transfer has certain risks:
- When you transfer your loan balance between lenders, you are paying off the new loan using the amount from your original loan. As a result, this can either make it more difficult or impossible to repay your old debt.
- Another risk is that if you don’t qualify for a new loan, you might have to pay interest on both loans for an extended period. This can prove to be expensive, since you are now repaying two loans at the same time, increasing your debt.
- If your latest credit score isn’t as high as required, you might not get approved for a new loan. If any of these situations occur and you can’t repay the new debt by its due date, you may incur late fees and penalties from the lender.
If you are in a position where your debt is high, you may want to consider a personal loan transfer. Remember that your goal is not to get out of debt; the goal is to alleviate the stress and pressure that comes with undertaking loans. To get an instant approval personal loan, visit Piramal Finance for more information.