Paying a high interest rate? Calculate exactly how much you save by transferring your loan to a bank offering a lower rate.
About Balance Transfer
A balance transfer means moving your existing loan from your current lender to a new lender offering a lower interest rate. The new bank pays off your old loan and you start paying EMIs to the new bank at the lower rate — saving significant interest over the remaining tenure.
Balance transfer makes sense when the new rate is at least 0.5-1% lower than your current rate and you have significant tenure remaining.
The new bank charges a processing fee of 0.5-1% of the loan amount. Factor this in — savings should clearly exceed the transfer cost.
Transfer early in your loan tenure when most of your EMI goes towards interest. Late-stage transfers save less.
Many banks offer a top-up loan during balance transfer — extra funds at home loan rates, useful for renovation or other needs.
FAQ