Balance transfer is the process of transferring the outstanding loan amount from one bank to another. A personal loan is transferred to get a better interest rate and reduce the monthly EMI burden.
There are several reasons why you must opt to transfer personal loans from one bank to the other:
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In order to avail the facility of personal loan balance transfer, the applicant must fulfill some basic eligibility criteria. They are as follows:
Banks allow the transfer of credit card accounts, personal loan accounts and home loan accounts. The process is easy and hassle-free and requires you to follow a few simple steps. You must submit an application requesting the transfer of loans to some other bank.
Once the request is raised, the bank will issue a NOC along with a statement that provides details of the loan amount and a letter of consent. The next step is to submit the documents to your preferred lender and wait for approval.
Your preferred bank will verify the documents submitted and then approve the transfer request, once they are satisfied with your track record. The new lender will sanction the outstanding loan amount to the previous bank for the closure of the personal loan. Once the transfer of the loan is complete, the former lender will provide all the documents to the new lender. The loan account will be closed and a new account will be opened with the new lender.
You must keep in mind that the transfer of the loan from one bank to another, means you are taking a fresh loan from the new bank. Therefore, while transferring your existing loan, you have to follow all the procedures like document verification, technical evaluation, payment of processing fees and CIBIL verification.
SEE ALSO: Things To Check Before Availing A Loan?
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