A personal loan (kind of unsecured loan) availed by individuals on the basis of some criteria, employment histories, such as level of income, credit score, and scope for repayment. While sanctioning the loan the lender provides all the loan terms like loan amount, interest rate, and repayment tenure.
The personal loan is a great tool to finance all your necessary emergencies, by converting the total loan amount into smaller monthly EMIs.
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The process in which the borrower transfers his/her outstanding personal loan amount from one lender to the other, offering a lower interest rate, is known as personal Loan Balance Transfer This facility is not just for personal loans but other loans like auto, home, etc too.
In the case of the personal loan balance transfer, the new lender repays the loan amount to the old lender. You will also have to pay extra charges levied on the prepayment clause. Along with this, the borrower has to pay the processing fee for the new loan. However, all of this compensated by the lower interest rate being charged.
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Bank transfer is a great opportunity to refinance your loan and get access to better loan terms for a different lender. Some of the benefits of a personal loan balance Transfer include:
These are some of the benefits of a personal loan balance transfer, but you must evaluate all the terms and conditions before opting for the service.
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While the process is very lucrative, not many borrowers avail of this service. A balance transfer is a better way to re-evaluate your loan and get the chance to reduce the interest rate.
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