Know Everything About Balance Transfer?
What is a Balance Transfer?
The balance transfer can be understood better, in a way when you pay off the existing balances on your loans or credit cards by transferring them to another Bank or NBFC (financial institution).
What are the benefits of Balance Transfer?
Mainly there are two reasons why you would prefer to go for a Balance Transfer and they are as follows:
- Lower Rate of Interest: There are times when you avail a loan at a rate of interest which seems to be the best one at that particular time. But over time you feel you can get a better rate of interest from another financial institution because of your good loan track.
- Loan Amount Enhancement: You run into instances that the loan amount you estimated would be sufficient, but with time you feel you would require an enhancement. Loan amount enhancement is also referred to as loan top up and some financial institutions can only go to the fixed limit depending on the profile of the person, income, and property value. You can always transfer your existing balance to another financial institution for loan amount enhancement because of your good loan track.
- Single Creditor: Nobody wants to pay multiple creditors or have multiple due dates. It gets difficult to manage and always keep you tensed about the due dates. You can opt for a Balance Transfer and clear your all creditors while you avail a bigger amount from another financial institution.
What is the most important thing in Balance Transfer?
The most important thing in case of Balance Transfer is the existing or past loan track. If you have a strong track record in terms of availing loans or using credit cards, then you can apply for a Balance Transfer after 1 year of availing the loan.
Crucial point: Successful Loan Track
Points to Ponder!
- You are advised to know everything about the loans you availed and the ones you are willing to. You should know about the hidden clauses and charges
- Balance Transfer could come with a setback of processing fee. Usually, the processing fee is around 3%. If the loan amount is big, then this fee will pinch you a lot and convince you not to go for a Balance Transfer. On the contrary, you will always save money after calculating the difference in interest amount over the years. You are advised to calculate it and know for sure about the benefit.
- Loan foreclosure charges could also be a turning point. One should always know about such details before availing a loan. This charge varies from 2-5% depending on the financial institution.
How do I complete a balance transfer?
- When you respond to a balance transfer offer, you’ll indicate who you want to pay, the account numbers, and how much you want to transfer
- Once you’re approved for the balance transfer, the Bank contacts your creditors or billers on your behalf and pays them the amount you indicated. It can take up to two weeks for this process
- If you have any payments due before that time, you’ll want to go ahead and make those payments by their due dates to avoid late fees
For further information on Balance Transfer, feel free to call us at 8448448519.
We are happy to help you!