How to Reduce Burden of an Existing Personal Loan | Kotak Mahindra Bank - Personal Loan Stories

28 DECEMBER, 2021

A personal loan can be of great help when you are struggling to make ends meet and want money to fulfil your needs. You can use the personal loan amount for medical emergencies, consolidation of debt, travel or wedding plans, home renovation, kids’ education, etc. The best thing is, you can avail the loan at attractive interest rates and repay it through flexible tenures. However, you might get disheartened when you find out that you are paying a higher personal loan interest rate as compared to new borrowers. Especially when you have availed a loan for needs like consolidation of debt, incurring wedding, travel expenses.

But worry not, for you have the option of a balance transfer. Find out more below.

What Is a Personal Loan Balance Transfer?

Through the facility of a personal loan balance transfer, you can switch your loan to a lender that is offering you lower interest rates and better services. With a transfer balance, you can save on the interest cost and get added facilities.

How Does a Balance Transfer Work?

When you opt for a balance transfer, your loan amount is transferred to the new lender. The new lender pays your outstanding loan to the existing lender and you are required to pay the remaining EMIs to the new lender at their interest rate.

Benefits of Loan Balance Transfer

  • Enjoy better service

You might not know the quality of the lender’s services until you avail the loan. Until the time you realise that the services are not up to the mark, it's late. Thankfully, you can still enjoy better services with Kotak personal loans. By transferring your personal loan to Kotak Bank, you can enjoy efficient customer services and prompt communication.

  • Reduced interest rate

You might have availed a personal loan at higher interest rates with high EMIs. However, with Kotak personal loan balance transfer, you can reduce your EMIs and get a lower personal loan interest rate. It is the most important benefit of transferring your loan, as it reduces the cost of borrowing. You can reduce your interest outgo and thus your EMIs.

  • Restructure of loan

By transferring your loan, you can also restructure your personal loan. You can negotiate your loan terms with the lender and opt for a longer tenure if you need. Alternatively, you can also shorten your loan tenure and save on interest costs.

  • Added facilities

With us at Kotak, you can avail better facilities by transferring your loan. For example, you can avail a top-up loan on your personal loan if you fulfil the eligibility criteria.

Opting for Kotak Mahindra Bank’s personal loan balance transfer can help you reduce your interest rates and save money. However, you must know about the various charges like administration fee, balance transfer charge, processing fee etc. that lenders levy when you switch your loan. You must ensure that you consider them while calculating the total savings by the transfer. Experts usually suggest doing a cost-benefit analysis to find the total savings before proceeding.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.