We all know that whenever we take a personal loan, the interest rate is high. Despite this, its demand is the highest in today’s time. If your credit score is good and you have been paying your credit card and loan EMIs for a long time.
Come, let us tell you a way with the help of which you can reduce your interest burden. One way to reduce the interest charged on the loan is through a balance transfer. If you adopt this method then it helps in reducing your interest rate and lightening the debt.
What is Balance Transfer?
Balance transfer is one way in which you can get your running loan transferred to another bank. But this will be beneficial only if the other bank is offering you a lower interest rate. If you have a good credit score, you will easily get any bank balance transfer offer. Your credit history is very important regarding the interest rate.
If your credit score is good, then any bank will easily offer you a loan at a lower interest rate than the current interest rate. If you transfer your loan balance to another bank, you will have to pay a lower EMI. In this case, you will be able to save something every month.
Understand balance transfer in such a way that if you have taken a loan of 10 lakhs from a bank, on which you pay EMI of 10 thousand rupees every month. You have a good credit score. In such a situation, some other bank is offering you a loan at a lower interest rate.
In such a situation, you can repay your entire earlier loan by taking a loan from another bank at a lower interest rate. After this, you can pay EMI to another bank at a lower interest rate. If you have to pay an EMI of Rs 8,000 to another bank, then you can save Rs 2,000.
Can pay by credit
If you have two credit cards, you can transfer money from one card to the other. With this, you can easily pay any bill anywhere. Many banks provide this facility to their customers. In this, you can make the outstanding payment from one credit card to another.
Along with this, you can also choose your EMI option in Balance Transfer. You must know one thing that you can take only that much limit in bill transfer, as is the limit of your card. Suppose your card limit is Rs 1 lakh, then you can transfer bills up to Rs 1 lakh only.
keep these things in mind
You may find it very easy to transfer balance, but you should take care of many things in it. You should take special care of how much installment you will pay every month. Along with this, you should also keep in mind that there should not be any change in the tenure of your loan.
You should also know about the rest of the charges levied by the other bank. Transfer balance only after knowing about the processing fees and other charges of the other bank. You should also keep in mind that the bank is not offering your teaser loan. You should take a decision only after comparing the loan amount and charges of both the banks.
