Balance Transfer
Balance Transfer
During emergencies we don’t think twice before spending and end up taking a personal loans at a high rate of interests. A lot of people often make this mistake, but there are ways to turn around this too. After your emergency is over, you can look at consolidating your debts at a lower rate. A balance transfer is easy and it saves you money.
Standard Chartered offers Personal Loans at attractive rate of interest, with 0 documentation
Transferring your personal loans or personal loan balance transfer is a process by which you can transfer your outstanding personal loan amount from one lender to another one which is offering a lower interest rate on the outstanding loan amount. Of course, you need to carefully compare rates and check between different banks to ensure you get the lowest rate of interest and thus save on total interest payable. Also, keep an eye out for any processing charges during balance transfer.
In such cases, the business may take a loan from banks or NBFCs to support their daily needs. Such a loan is called a Working Capital loan. The critical thing to note is that businesses are not allowed to use this amount for making any investment or buying long-term assets.
Features Of Balance Transfer
- Lower Interest Rates: Many balance transfer offers include a lower interest rate for a promotional period. This can significantly reduce the amount of interest you pay, especially if you transfer balances from high-interest accounts.
- Period: Balance transfers often come with a promotional period (e.g., 6, 12, or 18 months) during which a lower interest rate is applied. After this period, the interest rate typically reverts to a higher standard rate.
- Balance Transfer Fees: Most financial institutions charge a balance transfer fee, which is usually a percentage of the transferred amount. This fee can impact the overall savings you might achieve through the balance transfer.
- Credit Limit Considerations: The amount you can transfer is typically limited by the credit limit of the new account. Some institutions may also have specific policies limiting the maximum percentage of the credit limit that can be used for a balance transfer.
- Impact on Credit Score: Initiating a balance transfer can affect your credit score in several ways. It may lead to a hard inquiry when you apply for a new credit card, which can temporarily lower your score. However, if a balance transfer helps you reduce your credit utilization ratio, it can positively impact your score over time.
Benefits Of Balance Transfer
- Lower Interest Rates: One of the primary advantages of balance transfers is the opportunity to move existing credit card balances to a new card with a lower introductory interest rate. This can help borrowers save money on interest charges, especially if they are currently carrying balances on cards with higher IR.
- Consolidation of Debt: Balance transfers allow individuals to consolidate multiple credit card balances onto a single card, streamlining their debt repayment process. Having one consolidated balance makes it easier to keep track of payments and reduces the risk of missing due dates.
- Interest Savings: By taking advantage of a lower introductory interest rate, borrowers can reduce the amount of interest they accrue on their outstanding balances during the promotional period. This can result in significant savings, especially for individuals with large credit card balances and high-interest rates.
- Simplified Payment Structure: Consolidating multiple credit card balances onto a single card simplifies the payment process. Instead of managing multiple due dates and minimum payments, borrowers only need to make one monthly payment towards their consolidated balance.
- Improved Credit Score: When used responsibly, balance transfers can have a positive impact on an individual's credit score. By reducing credit card balances and lowering overall credit utilization ratios, borrowers may see an improvement in their credit score over time.
