At times, taking a personal loan leads to heavy burden and stressful life. To overcome this stress, borrowers take certain steps such as choosing the personal-loan balance transfer scheme. The (personal-loan) balance transfer scheme enables you to carry forward your outstanding loan balance at a new low rate of interest along with better features from another lender. 

Usually, the main reason to have a personal loan balance transfer is to get a lower rate than the existing one, offered by any other financial institution.

But what are things that you must keep in mind when opting for personal-loan-balance-transfer? 

1. Rate of Interest: The personal loan interest rate should obviously be lower than what is offered by the existing lender.

2. Processing charges and penalties: Check the processing charges of the new lender and the prepayment penalty charges of the old lender to ensure that the loss isn’t larger than the gain. This is applicable for the prepayment penalty charges as well.

3. The minimum amount of Loan: Check whether your account fulfils the minimum loan amount required to avail a personal loan balance transfer from any other lender.

4. Actual benefit on operation costs: Calculate what will be actual benefit after deducting all the processing and penalty charges that you’ll have to pay. A considerable gain here indicates that it’s actually worth going for such a big hassle!

Ensure that you read the documentation, terms and conditions of both lenders carefully before signing off on a personal loan balance transfer to avoid any unwelcome surprises in the future.

Must Read: what is the Pros and Cons of Loan Balance Transfers?