Loans & EMI Guide #70: Balance Transfer Loan — What It Means & When to Use It

 

Want to Reduce Your Loan Burden? Try This Smart Hack: Balance Transfer

If you’re stuck paying high interest, a loan balance transfer lets you switch lenders and save big. Here’s how it works.

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🧾 What is Balance Transfer?

You shift your existing loan (home/personal/credit card) to another lender who offers:

• Lower interest
• Better terms
• Flexible repayment

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💸 Example

Current loan: ₹5 lakh @ 14%
New lender: 10.5%
You save ₹25,000–₹40,000+ in interest over 3–5 years.

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✅ When to Do It

• CIBIL score 750+
• Strong repayment history
• Remaining loan tenure = 1+ year
• You’re paying more than 12% interest

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⚠️ Watch Out For

• Processing fees (₹500–₹5,000)
• Foreclosure charges (from old lender)
• Delay in loan closure & CIBIL update

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💡 Credit Card Balance Transfer

Also works! Move balance from high-interest card (36%) to one with 0–3% for 3 months. Saves you stress and money.

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✅ Conclusion

Don’t stay loyal to high-interest lenders. Use balance transfer as a money-saving weapon — smart borrowers always compare & switch.

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