Business Loan Balance Transfer
A balance transfer is a process of transferring the outstanding balance of a loan from one bank to another at a lower interest rate. If anytime you are not satisfied with the bank’s services and accessibility, then you can go for the business loan balance transfer. The prime motive for Balance Transfer is to reduce the EMIs by switching over to a lower rate of interest, to a new lender. It is a great feature to reexamine your debt, make changes to it, and also tweak it according to your requirements.
Why do you need a Business Loan Balance Transfer?
- Better rate of interest
- Easy terms and conditions
- Extended duration of the loan
When you should go for a Balance Transfer?
Go for it when you find the following benefits -
1. Lower interest rates –
Balance transfer should be done if the interest rates offered by your existing lender on business loan
are higher. You can evaluate the interest rates with other lenders and can switch to the lender offering a lower rate of interest rate.
2. Need to save more – When a balance transfer is done to avail the loan at lower interest rates, it eventually leads to a decrease in the outgoing EMIs. This helps in saving those extra amounts, which can be utilized for the expansion of business. The more the saving on the debt amount, the more beneficial it is in the long run.
3. Better Services- Few lenders offer benefits on business loan balance transfer like zero processing fees, waiver of the last EMI and so on. You can thoroughly evaluate the additional features of other lenders and then choose it accordingly for the balance transfer. It is advisable to go for renowned lenders, who are the top players in the market and avail great features customized according to your need.[l1]-
Factors to consider before going for a Balance Transfer
1. Compare the before and after deal – When you have decided to go for a balance transfer, make sure it a profitable one. The new lender should provide you with low interest rates and also should not increase your tenure; else there is no point in taking ahead the process further.
2. Consider processing fee and other charges involved - The processing fee charged by the new lender also should not be a burden. Go for the new deal, only if it is a profitable one.
3. Read the fine print carefully – To avoid regretting later by signing the official deal of business loan balance transfer, it is significant to carefully read the fine print. Fine print is the complete legal document, which mentions the terms and conditions, which you might agree to by signing the document before reading it. Make sure to go through each and every detail, mentioned in the document.
Calculations showing EMI, yearly payments and yearly saving on business loan Balance Transfer
Suppose Mr. Kapoor has an existing business loan outstanding amount of Rs. 20 Lakhs for tenure of 4 years. He can transfer the existing business loan to a new lender at a lower rate of interest. By transferring a 4 years business loan of Rs. 20 lakhs from 16.49% to 15.65%, EMI can be reduced from Rs. 57,183 to 56,322 So, the total savings on the interest after balance transfer is Rs. 861 per month
How Business Loan Balance Transfer Works?
In the case of a balance transfer, the existing loan of the applicant is transferred to a new lender. Once the balance transfer is done then you can enjoy the low-interest rate and save on your EMI. Let’s have a look at how this entire process works:
Process of Business Loan Balance Transfer
If you want to go for a business loan balance transfer, take a look at the process below:
- Check the current rate of interest for your loan that you can get and calculate the interest savings.
- Calculate the estimated cost of loan transfer including various fees.
- Calculate the net benefits and decide whether you want to transfer your loan or not.
- Shortlist the new lenders that you wish to transfer the existing outstanding loan to.
- Compare and check the offered interest rate, your loan amount eligibility, and their entire loan process.
- In case you wanted to go ahead with the balance transfer, apply for a NOC and foreclosure letter from the existing lender.
- Apply for a loan at the new lender; submit the loan documents with a complete repayment record.
- Obtain a sanction letter and execute the new loan agreement with the new lender.
- Take the disbursement from the new lender via cheque/demand draft in favor of an existing lender and deposit the same with the existing lender.
- On receipt of an outstanding loan amount, the existing lender will cancel all the cheques and ECS and close your loan account.
Business Loan Balance Transfer charges
If you are planning to do a business loan balance transfer, you will have to bear a few additional charges of processing fee, foreclosure charges, and stamp duty on the loan agreement.
Business Loan Balance Transfer Calculator
Use the business loan balance transfer calculator to figure out the reduction in EMIs and the cost of the loan, resulting from a business loan balance transfer. Using business loan balance transfer calculator is pretty simple; complete the following steps to find out profits from the transfer of your balance
- Enter the principal outstanding of your existing business loan
- Enter the balance loan tenure of your business loan
- Enter the interest rate offered by the new lender
Documents required for Business Loan Balance Transfer
- Application form with photograph
- Pan Card/Aadhaar Card
- Latest residence proof
- Latest office proof
- Last 12 months bank statement
- Latest foreclosure letter from current bank
- Proof of business existence
- Last 3 years Income Tax Returns with computation of income
Best banks offering Personal Loan Balance Transfer
Depending on the credibility of the buyer, there are few banks which waive off the processing fee and can also waive off the last EMI as offers on transfer of your balance. It is vital to evaluate the complete details, about the new lender before taking the decision on balance transfer.
Business Loan Balance Transfer to Axis Bank
Get complete assistance on business loan balance transfer with hassle free documentation process from Axis Bank.
Business Loan Balance Transfer to Kotak Bank
Want to save on the hefty EMI outflow towards your business loan? You can now save on the installment amount of your business loan with the balance transfer from Kotak Bank.
Business Loan Balance Transfer to Bajaj Finance
Looking to refinance your business loan at lower rates of interest? Enjoy attractive interest rates on business loan balance transfer with Bajaj Finance.
Business Loan Balance Transfer to SBI Bank
Are you tired with the lengthy documentation process involved in transferring your business loan? You can get speedy approvals on business loan balance transfer from the leading bank of the country, SBI bank.
Business Loan Balance Transfer to ICICI Bank
Enjoy flexible repayment tenures on business loan balance transfer with ICICI bank.