Balance Transfer Facility: Should You or Should You Not?

Should You Go for Balance Transfer on a Loan?

Read this post to know why balance transfer can be a boon.

The balance of transfer on loans is a facility where a customer transfers their outstanding principal amount to another bank / lending institution. Most types of loans have a balance transfer facility including home loans, education loans, business loans and mortgage loans.

Here are 3 reasons why a balance transfer can be beneficial:

1. Banks offer a better interest rate to new borrowers since they want to gain business. This means that it will end up saving you money in the long term
2. If you are unhappy with the loan terms such as prepayment penalty and foreclosure charges offered by a lending institution, you can transfer it to another one that offers favorable terms
3. It offers a chance for debt consolidation too. If you want to repay your loan faster or reduce the EMI, you can do so easily by availing of a balance transfer facility

What are your thoughts on the balance transfer facility on loans? Would you consider it? Let us know.