How to Save EMIs with Personal Loan Balance Transfer?


Personal loans are of great help at times of urgent financial needs. These are unsecured, easy to avail, and have a quick approval and disbursal process. However, when a person borrows a personal loan in an emergency, they often don’t get enough time to research, compare, and find the best deal.

At a larger stage, they realize other lending institutions are offering lower interest rates and better terms and conditions. Instead of continuing with the current lending institution, a personal loan balance transfer allows such borrowers to revise their loans.

Transferring a personal loan is much easier for those who have consistently paid their EMIs and stay updated with their credit card bills. Individuals can complete the loan transfer process within minutes and save significant money on EMIs. Let’s see how.


What is a Personal Loan Balance Transfer?

Balance transfer means transferring an existing loan’s outstanding amount to a new loan account with a different lending institution. The primary purpose of transferring a loan is to avail of better offers, including lower interest rates, revised repayment terms, or other favorable features.

The process is particularly advantageous for individuals who are paying a high interest rate on their existing personal loan, have improved their loan eligibility, or want to opt for shorter loan tenure. However, before signing on the dotted line, one must carefully evaluate the offer and calculate the costs involved.


Features of Balance Transfer that Help Save EMIs

A balance transfer allows borrowers to transfer their existing loan to a new lender at reduced interest rates or better terms and conditions. Let’s look at the features with which the process helps save EMIs.

  • Reduced Interest Rates: A lower interest rate is the most critical feature that helps minimize personal loan EMI amounts. A reduced interest rate means a smaller EMI amount, leading to more significant savings and increased focus on life’s other financial goals.
  • Adjusted Loan Tenure: Balance transfer gives borrowers a chance to change their repayment terms. They may extend their tenure to reduce the EMI amount or reduce their tenure to save on the interest outgo. Since an individual’s repayment capacity may change over time, a balance transfer is perfect to revise the repayment plan.
  • Top-Up Facility: Eligible borrowers can access a top-up facility while transferring their loan to a new lending institution. For instance, if an individual needs more loan amount to cover their expenses while transferring a loan, they may get a top-up on that amount and pay the EMIs accordingly.
  • Better Loan Terms: While transferring a personal loan, an individual can always select a lending institution offering better terms and conditions on the same loan amount. The better terms may be related to the loan tenure, payment, processing charges, pre-closure, late payment penalties, etc.


Points to Consider

Keep these points in mind to maximize the savings with a personal loan balance transfer:

  • Evaluate the Deal: It’s crucial to calculate the total amount the borrower has to pay to the new lending institution. The interest rates might be lower, but checking the costs involved will avoid a debt trap for the borrower. Those who want to prolong their loan term with a balance transfer must remember that longer loan tenure will increase the total interest outgo on the same loan amount.A balance transfer calculator helps the borrower calculate the costs and compare the multiple options available. Moreover, paying higher EMIs for a shorter term might be better than spending a bigger interest outgo.
  • Consider Charges to be Paid: Depending on the lending institution’s policy, the borrower may need to pay pre-closure charges while transferring their loan. Usually, it is a small percentage of the outstanding amount payable to the new lending institution. Besides that, the borrower may also need to pay pre-payment charges to the existing lending institution for paying off their loan before the loan tenure’s completion. Calculate these charges and ensure they are less than the money saved through the loan transfer.
  • Read the Fine Prints Carefully: Those opting for a personal loan balance transfer will receive an agreement they need to sign. So, knowing the key terms and conditions is important. Read the documents, especially the fine print, carefully before signing the agreement to avoid unnecessary complications. Clear all doubts and never sign something without understanding it.



A balance transfer is an excellent option for those who want to save money on their personal loan EMI amount. Transferring personal loan outstanding balance can provide long-term benefits with a lower interest rate, revised repayment tenure, and better terms and conditions. However, assessing repayment capacity and understanding the conditions properly is vital before signing the deal.

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