Top-Up & Balance Transfer of Personal Loan
By Anupama Deshpande | November 19, 2019

Personal loan top-up and personal loan balance transfer have become very popular now-a-days. Any existing customer can apply for a personal loan top-up in order to avail more funds, for which he/ she need not go through the procedure of availing personal loan from another bank. Similarly, one can balance transfer his/ her personal loan to another bank, if the deal is profitable.

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Now let's come to Top-Up & Balance Transfer of Personal Loan which is described below:

Personal loan top-up is an additional amount of loan that can be availed on an existing personal loan but after some time of original loan disbursement. You will be able to get it only if you have been very regular in paying the EMIs of your existing personal loan. This amount can be used for a variety of personal or professional needs, other than for speculative purposes. Personal loan top up amount will depend on bank's lending policy and credit risk of the customer.

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Various factors to be considered by the bank for releasing top up loan are:

• Delay in payment of EMI
• Default in repayment
• Cheque bounces or EMI bounces
• Job stability
• Increase in income
• Credit score
• Total number of loans availed by the customer

Banks generally offer a top up to its customer after 9 to 18 months of the sanction dateof original personal loan. Personal loan Top-up is usually given at either the existing rate or a lower rate.

You can check out the main features and benefits of Personal loan top-up as listed below:

• Minimal documentation
• No requirements of collateral
• No security required
• Attractive rate of interest
• Quick processing
• Fast disbursal of loan amount
• Flexible repayment options

Personal loan balance transfer or Personal loan refinance is actually the transfer of outstanding amount of existing loan from one lender to another. It is preferred when better terms are offered by another lender such as lower rate of interest, longer tenure, nil prepayment charges, higher eligibility, etc. It is considered the best way to lower Interest Rates on your Personal Loan.

Sometimes it is also availed in order to obtain additional top up loan from the new lender. By availing this option, you can start saving on your EMIs and also the burden of your existing loan will be reduced.

It is beneficial for you to opt for a personal loan balance transfer during the earlier tenure of your personal loan as at this time, a significant part of your EMI goes towards paying the interest.

There are multiple features and benefits associated with a personal loan balance transfer as detailed below:

• Reduce the burden of your existing personal loan by opting for a personal loan balance transfer
• You can avail an additional top-up loan from the new lender
• Better features
• No requirement of collateral
• Extended loan tenure
• Minimal documentation
• Reduced rate of interest
• Lower EMIs
• Speedy processing
• Quick disbursal of funds
• Flexible repayment options

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Personal Loan Balance Transfer also comes with a cost. Following types of costs are involved in Personal Loan Balance Transfer:

1. Prepayment or foreclosure Charges levied by the existing lender
2. Processing Fee charged by the new lender
3. Any other charges such as stamp duty, etc. charged by the new lender

Balance transfer is a very beneficial for individuals who have taken a personal loan still very few avail it due to unawareness. Many banks also offer you a top up personal loan on your personal loan balance transfer which gives you an option to avail more funds at lower rates. You should check for interest rates offered by various lenders on balance transfer. You can also make use of the balance transfer calculator to calculate the amount you will save if you go for a personal loan balance transfer.