Since the news broke out about NBFCs increasing their lending rates by 2%, customers all over the nation have been tensed and in panic mode. Over the past couple of weeks, we have been sharing information about why taking a “Loan Balance Transfer” is important.
For those who don’t know what a loan balance transfer is, please check these blogs;
NBFC Hikes Interest Rates by 2% – It’s time for Loan Balance Transfer!
Steps in Home Loan Balance Transfer Process
Personal Loan Balance Transfer Process
Benefits of Home Loan Balance Transfer
In general, a loan balance transfer is a process where you shift your ongoing loan from the existing lender to the new lender. This can be done because of such rate hikes where you would shift to a lender who offers a lower rate of interest.
A Loan Balance transfer is a long process and there are many facts that the common man can sometimes misunderstand. Hence to ensure everyone is on the same page, we have mentioned 5 such myths and explained the true facts;
Transferring the remaining debt amount isn’t the same as repaying it:
When you transfer a loan balance from one bank to another, it does not mean you have cleared the loan and taken a new one. It only means that you will now repay a lower EMI amount and save more money on interest.
Transferring remaining debt amount is free of cost:
If you think that transferring the debt amount is free of cost, then you are highly mistaken. Usually, there are fees and costs associated with transferring the loan amount. In case you have read your loan agreement properly, the cost of transferring the loan will be mentioned. If you don’t have any fees mentioned in the agreement, then it’s good for you as you can save money.
Transferring debt more than once is good for savings:
Wrong. If you planned to transfer your loan amount for the first time, it would have been due to better interest rates and terms. However going for a repeat transfer would not be advisable as the costs of transferring the loan amount as compared to the savings would not be sufficient enough as per your expectations.
Applying for a balance transfer without lower credit score is fine:
This point must be thoroughly thought on. When you apply for a loan balance transfer with a low credit score, getting a better rate of interest and terms might not be possible. All your negotiation skills would not work unless your score is good. If you have an amazing credit score, Banks would usually provide you with an amazing deal to get you to transfer your loan to their bank.
Hence such myths don’t allow customers to see the clear picture about loan balance transfer. We at Ruloans hope that customers can utilize this information and only after understanding the facts, take a decision. In case you need our help on a loan balance transfer, Click Here
