Car Loan Balance Transfer
A car loan balance transfer refers to the process of transferring the outstanding balance on your car loan from the current lender to a new lender. By switching a lender, you can get the benefits of lower interest rate, reduced EMIs, reduction in overall cost of the loan, better repayment terms and better customer services. Most lenders offer a balance transfer facility on a car loan with a simple and quick process.
Why do you need a Car Loan Balance Transfer?
Benefits of shifting your car loan to the new car loan lender include:
- Low interest rate
- Favourable repayment terms
- Reduction in the overall cost of your car loan
Under what conditions you should go for a Balance Transfer?
- If a new lender is willing to offer a better deal on a car loan – better features, better interest rates
- If your CIBIL score has improved recently and now you can avail a better deal
- If you need a top-up car loan at lower interest rates
Factors to consider before going for a Balance Transfer
- Offers on a car loan balance transfer
- Calculate the car loan foreclosure charges, transfer cost and overall profit
- Read important details and fine print carefully
How Car Loan Balance Transfer works?
Since you already have a car loan with a lender, you don’t need to go through much documentation. Take the following steps to transfer your car loan from one lender to another:
- Collect some important details from your current lender about your car loan, such as outstanding balance, the EMIs you have paid so far, current rate of interest, and on whose name the demand draft should be made.
- Then approach the new lender to apply for a balance transfer.
Documents required for Car Loan Balance Transfer
Documents required for a car loan balance transfer may vary from lender to lender. Here is a general list of documents required for a balance transfer of a car loan.
For salaried professionals
- 3 months’ salary slips
- 3 months’ bank statements showing salary is being credited
- Identity proof: Voter ID card / Aadhaar card/ passport/ driving license
- Address proof: Telephone bills / electricity bills / water bills (not more than 3 months old)
- PAN Card
- Filled car loan balance transfer application with passport size photographs
For self-employed individuals
- PAN Card
- Balance Sheet and Profit & Loss Statements, with relevant annexures and schedules, from the last 3 years
- Current account statements of the business account
- Savings account statements of the individual