Education Loan Balance Transfer
An education loan balance transfer is a process that allows you to transfer the outstanding balance on your education loan from current lender to new lender, especially one which offers lower interest rate. The loan is funded by most banks and NBFC’s to the needy students, to pursue their studies further. This is one service which has helped for years to aid aspiring students in achieving their academic pursuits. The purpose of this loan is to help the poor and needy students to undertake basic education as well as also to those meritorious students to pursue higher/professional/technical education, after passing 10+2 or equivalent.
Why do you need an Education Loan Balance Transfer?
- Better rates of interest
- Easy terms and conditions
- Extended duration of the loan
Under what conditions you should go for a Balance Transfer?
- Lower Interest rates – Balance transfer of a loan is done to lower the interest rates of the existing loan.
- Need to save more – When the interest rate of the running loan is reduced, it eventually leads to reduced EMIs. This helps in saving those extra amounts, that can be utilized for the expansion of business.
- Better Services – The process of balance transfer should be done with the renowned players in the market, to avail better rate of interest, great features and services.
Factors to consider before going for a balance transfer
- Compare the before and after deal – Ensure to go ahead with a profitable deal of balance transfer on education loan. It should have a low interest rate, and convenient repayment tenure
- Consider processing fee and other charges involved – The process of balance transfer involves processing charges, foreclosure charges and few other charges, which the applicant will have to abide by.
- Read the fine print carefully – Fine print is a complete legal document, mentioning all the terms and conditions of the balance transfer. It is crucial to read the document thoroughly and then sign it.
Calculation showing EMI, yearly payment, and yearly saving on education loan balance transfer
Suppose Mr. Gupta has an existing education loan outstanding amount of Rs.7 Lakhs for a tenure of 4 years. He can transfer the existing education loan to a new lender at a lower rate. By transferring a 4 year education loan of Rs. 7 lakhs from 11.57% to 10.25% the EMI can reduce from Rs. 18,286 to Rs. 17,837. The total saving on interest after balance transfer is Rs. 21,552
How education loan balance transfer works?
Process of Education Loan Balance Transfer -
If you want to go for an education 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
Education Loan Balance Transfer Charges
The balance transfer on education loan
involves additional charges of processing fee, foreclosure charges, and stamp duty on the loan agreement.
Education Loan Balance Transfer Calculator
Use the education loan balance transfer calculator to figure out the reduction in EMIs and the cost of the loan, resulting from an education loan balance transfer. Using education loan balance transfer calculator is pretty simple; complete the following steps to find out profits from the balance transfer.
- Enter the principal outstanding of your existing education loan
- Enter the balance loan tenure of your education loan
- Enter the interest rate offered by the new lender
Documents required for Education Loan Balance Transfer
- KYC Documents
- Last 6 months bank statement/ passbook.
- Guarantor Form- Optional
- Copy of admission letter of the Institute along with fees schedule.
- Marksheets/passing certificates.
Education Loan Balance Transfer offers
Different bank provides different offers and benefits on education loan balance transfer. Before finalizing the new lender, it is crucial to evaluate all the details on balance transfer of the chosen lender.
Education Loan Balance Transfer to Axis Bank
Transfer your education loan to Axis Bank and enjoy affordable interest rates.
Education Loan Balance Transfer to Kotak Bank
You can avail better services on your education loan balance transfer with Kotak Bank.
Education Loan Balance Transfer to Bajaj Finance
Enjoy hassle free documentation and complete assistance on education loan balance transfer with Bajaj Finance.
Education Loan Balance Transfer to ICICI Bank
Avail education loan with ICICI Bank at affordable interest rate.
Education Loan Balance Transfer to SBI Bank
Get best features and benefits on education loan with the largest bank of India, SBI