Personal-loan balance transfer: when does it make sense?
Moving an existing loan to a cheaper lender can save money, but only if the numbers work. Here is how to check.
What is a balance transfer?
A balance transfer means a new lender pays off your existing loan, and you then repay the new lender, ideally at a lower interest rate.
Check these before you switch
Look at the rate difference, the processing fee on the new loan, any foreclosure charge on the old loan, and how many months remain on your current tenure. A bigger rate gap and a longer remaining tenure usually mean more savings.
A simple test
Add up everything you would pay on the new loan, including fees, and compare it with what you would pay if you stayed. If the new total is clearly lower, a transfer may be worth exploring.
This article is general information, not financial advice. Approval, rates and terms are decided by the lender.