Loan balance transfer is a way to manage your credit liabilities where you take a loan from one lender and use that money to pay off any other loan or loans that you may have running. For any person who knows how to manage their money better, making good use of personal loan balance transfer can create a number of advantages! You can take a salary loan and use it for balance transfer to improve your financial situation considerably.
Here are the key benefits which you will get if you do a personal loan balance transfer to a new lender.
Why a Personal Loan Balance Transfer Can Be Beneficial
You can benefit from the reduction of loan interest rate
This is the single biggest reason why you should consider a personal loan balance transfer. An online loan will always work out to be much cheaper than any other mode of borrowing, especially when you use a personal loan app. The interest rate on your new loan should be lower than what you are paying on your current loan and if all else remains same like, total outstanding in current loan matches borrowed amount in new loan, and the duration remains the same as well, you would end up paying much less money when you transfer to lower interest rate personal loan.
You can benefit from extension of the loan duration
The situation which existed when you took a personal loan might change and if you find that you need more time to pay off your loan, doing a balance transfer to an online loan can help you extend your loan duration by a year or so. For example, you took a personal loan of 2 lakhs for three years but for any reason after say a year and a half, you think you want more time to pay off your loan, going for a balance transfer will help you extend the time for loan repayment. Simply transfer your balance to a loan for the duration with which you want to extend!
You can take the benefit of a top-up loan
Another reason why you should explore the option of doing a balance transfer to a salary loan is when you need more money. If you do a loan balance transfer, you are provided the option to take a top up loan as well. So, the new lender will provide you enough money to clear off your previous loans as well as give some extra money on top of it that you can use to fulfill your need of some extra cash. This method can be very useful if you need some money to handle any kind of emergency situation or if you need some money to buy new electronics or home appliances etc.
You can benefit by moving to a lender with better service
One key factor that people do not tend to give a lot of importance to when they take a loan is the service experience that they will get from lender. In this regard the modern, app based lenders are streets ahead of other conventional lenders. Since an app is available to you 24X7 and does not work based on specific office timing or location, you can expect to get much better customer service from these lenders. All requests will generally be processed in a matter of minutes.
You can benefit by consolidating your debt
This is a case for people who have taken too many small loans and are now finding it difficult to keep track of all of them. This may be personal loans or card debt. If you see that you have multiple EMIs and you are risking missing payment because you just forgot, it is much better to take one loan and pay off all the smaller loans. This way it becomes much easier for you to keep track of where your money is going and that everyone has received their monthly dues.
You can benefit from special offers by new lenders
Many lenders bring new offers which might work out to be a good deal for you if you do a balance transfer of your loan to them. May be a new lender came up with special low interest rate loan only for specific customers or maybe they are offering some attractive gifts to the customers who transfer their loans to them!
A personal loan can be a very useful money management tool as long as you make sure that you utilise it carefully. Do not borrow more that you can comfortably repay and always be extremely careful and diligent in making your monthly payments towards the loan.