Personal Loan Balance Transfer: Meaning, Benefits, Process and Charges

Personal Loan Balance Transfer: Meaning, Benefits, Process and Charges

A personal loan balance transfer allows you to move your outstanding personal loan to another financial institution, usually to access a different interest rate, tenure or repayment structure.
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Rs. 40,000 - Rs. 55 lakh

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Last reviewed: September 2026


In Summary

A personal loan balance transfer can help you manage an existing loan when a new offer provides suitable repayment terms. You should compare the complete cost before transferring your outstanding balance.


  • You can transfer your outstanding personal loan to another financial institution.
  • A lower interest rate can reduce your remaining interest cost.
  • You can choose a different tenure based on the available offer and your repayment capacity.
  • Processing fees and foreclosure charges can reduce your potential savings.
  • A longer tenure can reduce your EMI but increase the total interest payable.
  • You need to meet the new provider's applicable eligibility and verification requirements.
  • You should compare your existing loan with the new offer before making a decision.

A lower interest rate does not automatically mean a lower total repayment. Calculate your potential saving after including all applicable charges.

What is a personal loan balance transfer?

A personal loan balance transfer allows you to transfer your outstanding personal loan from your existing financial institution to another one. The new financial institution generally settles your eligible outstanding amount with your existing provider, after which you repay the transferred loan under the new agreement.


You can consider a balance transfer when you want to review your interest rate, EMI, tenure or overall borrowing cost. You should compare the remaining cost of your existing loan with the total cost of the new loan before proceeding.


For example, if you have an outstanding balance of Rs. 4 lakh and receive an offer at a lower applicable interest rate, calculate the remaining interest under your current loan. Then compare it with the interest and charges under the new loan.


✅  Check your pre-approved loan offer  with phone number and OTP → Apply online in 5 minutes → Receive funds within 24 hours*.


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Why should you consider a personal loan balance transfer?

You can consider a balance transfer when the new loan terms can reduce your overall borrowing cost or better match your repayment capacity.


You may reduce your interest cost

A lower applicable interest rate can reduce the interest payable over your remaining tenure. The actual saving depends on your outstanding principal, remaining tenure and new loan terms.

You may reduce your EMI

A lower interest rate can reduce your EMI. You can also reduce the monthly instalment by choosing a longer tenure, but this can increase your total interest cost.

You can review your repayment tenure

You can compare different tenure options based on your monthly budget. A shorter tenure can increase your EMI while reducing the period over which you pay interest.

You can reassess your borrowing

A balance transfer gives you an opportunity to review how much you still owe, how much interest you will pay and whether your current repayment structure remains suitable.


You should not increase your borrowing simply because additional funds are available. Consider additional borrowing only when you have a clear requirement and sufficient repayment capacity.

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When should you consider a personal loan balance transfer?

You should compare a balance transfer when you still have a meaningful outstanding balance and enough tenure remaining for a potential interest saving to matter.


Consider these factors before proceeding:


FactorWhat you should check
Outstanding principalHow much you still need to repay
Existing interest rateRate applicable to your current loan
Remaining tenureNumber of EMIs left
New interest rateRate offered to you
Processing feeApplicable fee on the new loan
Foreclosure chargesCost of closing your existing loan
New tenureRepayment period available to you
Total repaymentTotal amount you will pay under the new loan
Additional borrowingWhether you actually need more funds

If you have only a few EMIs remaining, your potential interest saving may be limited. Compare the numbers before paying transfer-related charges.

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What charges should you check before a balance transfer?

You should include every applicable transfer-related cost when calculating your potential saving.


ChargeWhat you should check
Processing feeFee charged for processing your new loan
Foreclosure chargeCost of closing your existing loan early
Documentation chargesCharges that may apply to documentation
Stamp dutyApplicable charges under relevant rules
Other chargesAny charges stated in your loan agreement or applicable documents

Your existing and new financial institutions can have different fee structures. Check the applicable charges before proceeding.

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How can you calculate your balance transfer savings?

You can estimate your potential saving by comparing the remaining cost of your existing loan with the cost of the new loan.


Potential saving = Remaining interest on existing loan − Interest on new loan − Transfer-related charges


For example, suppose you have:


  • Outstanding principal: Rs. 4 lakh
  • Remaining interest on existing loan: Rs. 80,000
  • Interest under the new loan: Rs. 55,000
  • Transfer-related charges: Rs. 10,000

Your estimated saving would be:


Rs. 80,000 − Rs. 55,000 − Rs. 10,000 = Rs. 15,000


*This is an illustrative calculation. Your actual saving depends on the applicable rate, outstanding balance, remaining tenure, repayment schedule and charges.

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Can a balance transfer reduce your EMI?

Yes, your EMI can reduce if you receive a lower applicable interest rate or select a longer tenure. However, you should also compare the total interest payable.


OptionEffect on your repayment
Lower rate with same tenureEMI and total interest may reduce
Longer tenureEMI may reduce, but total interest may increase
Shorter tenureEMI may increase, but total interest may reduce
Additional borrowingTotal repayment increases

Your priority should be to choose a repayment structure that fits your monthly budget without unnecessarily increasing the overall borrowing cost.

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Who can consider a personal loan balance transfer?

You can consider a balance transfer when you have a substantial outstanding balance, sufficient tenure remaining and a new offer that can reduce your overall borrowing cost after charges.


You can compare a transfer when:

  • Your current interest rate is higher than the new applicable rate.
  • You still have several EMIs remaining.
  • Your outstanding principal is significant.
  • Transfer-related charges are lower than your expected interest saving.
  • The new EMI fits your monthly budget.
  • You have checked the new provider's eligibility requirements.

If you have only a small outstanding balance or a few EMIs remaining, calculate the potential saving carefully before transferring.

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What documents do you need for a balance transfer?

You may need to provide documents for identity, income, employment and your existing loan.


Document CategoryAccepted Options
KYC proofAadhaar/ passport/ voter’s ID/ driving license/ Letter of National Population Register/ NREGA job card
Identity proofPAN card, Real-time image / photograph
Employment proofEmployee ID card, Letter of Allotment of Accommodation Issued by Employer
Income proofSalary slips — last 3 months, Bank account statements — last 3 months
OthersPension order, Utility bill, Phone bill, Piped gas bill, Property / Municipal tax receipt

The exact documents depend on your profile and the applicable balance-transfer process. Bajaj Finance currently lists KYC documents, PAN, salary slips, bank statements and existing-loan documentation among the documents that may be required.

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Can you transfer your personal loan to Bajaj Finance?

You can check whether a Bajaj Finance Personal Loan is available for your balance-transfer requirement, subject to eligibility, verification and applicable terms.

Bajaj Finance currently offers personal loans from Rs. 40,000 to Rs. 55 lakh, with repayment tenures ranging from 12 months to 108 months. The applicable interest rate ranges from 10% and 30.5% p.a., depending on your profile and applicable terms.


Bajaj Finance also provides a personal loan balance-transfer facility. You can apply online by entering your mobile number, verifying the OTP, providing your basic details, selecting the applicable loan amount and tenure, and completing KYC.


Before proceeding, compare the new loan's total repayment with the remaining cost of your existing loan.


 Check your offer in just 2 steps and apply online to get our loan.

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How to apply for personal loan?

To apply for a personal loan, you can follow these general steps:


  1. Check loan eligibility – Visit personal loan page, enter the loan amount you need, select the repayment period, and click on "CHECK LOAN OFFER" to check your loan eligibility.
  2. Enter personal details – Provide your personal, financial, and employment details to receive a personalised loan offer.
  3. Review your loan offer – Check your offer details and adjust the loan amount or repayment tenure, if required.
  4. Complete KYC verification – Verify your identity and bank details to proceed with your application.
  5. Speak to a loan specialist – Once your application is submitted, an executive will contact you with the next steps.
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Key offerings: 3 loan types

  • Flexi Hybrid Loan
  • Flexi Dropline Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 36 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of interest per annum

10% to 30.5% p.a.

Processing fees

Up to 4.13% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi Loans –Up To Rs 1,999 To Up To Rs 18,999/- (Inclusive Of Applicable Taxes)

Will be deducted upfront from loan amount.

Bounce charges

Rs. 700 to Rs. 1,200/- per bounce

“Bounce charges” shall mean charges for (i) dishonor of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonor of payment mandate or non-registration of the payment mandate or any other reason.

Part-prepayment charges

Full Pre-payment:

  • Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment

  • Flexi Term (Dropline) Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

  • Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

Part Pre-payment

  • Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment.

  • Not Applicable for Flexi Term (Dropline) Loan and Flexi Hybrid Term Loan.

Penal charge

Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term (Dropline) Loan:

Up to 0.295% (Inclusive of applicable taxes) of the Dropline limit (as per the repayment schedule) on the date of levy of such charges.


Flexi Hybrid Term Loan:

Up to 0.472% (Inclusive Of Applicable Taxes) Of The Dropline Limit During Initial Tenure. Up to 0.295% (Inclusive Of Applicable Taxes) Of Dropline Limit During Subsequent Tenure

Credit guarantee scheme feeUp to 1.18% p.a. (pro-rated daily till 31st March) (inclusive of all applicable taxes) of the loan amount
Credit guarantee scheme renewal feeUp to 1.18% p.a. (inclusive of all applicable taxes) on the outstanding loan amount as on April 01 of the subsequent Financial Year.
*Renewal Fee to be collected only for 3 subsequent financial years.
 
**If the Remaining Tenure is less than 12 months, the CG Fee in subsequent years shall be charged prorated.

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Frequently asked questions

Overview

Fees, Process and Documentation

Is a personal loan balance transfer a good idea?

A personal loan balance transfer may be considered if the new loan offers suitable terms. Compare the interest rate, processing fees, foreclosure charges, remaining tenure and total repayment cost before transferring your outstanding balance.

Yes, eligible borrowers can transfer an outstanding personal loan to another lender, subject to the new lender’s eligibility criteria, verification and applicable terms. The new lender may settle the eligible outstanding amount with your existing lender.

A personal loan provides funds for eligible personal expenses, while a balance transfer moves an existing loan from one lender to another. A balance transfer is therefore used to refinance an outstanding loan rather than meet a new expense.

A balance transfer on EMI means transferring an existing loan balance to another lender and repaying the new loan through scheduled EMIs. The applicable EMI depends on the transferred amount, interest rate, tenure and other loan terms.

Balance-transfer rules vary between lenders and may include minimum income, credit-score, employment, repayment-history and tenure requirements. You may also need documents related to your existing loan. Approval remains subject to the new lender’s eligibility, verification and applicable terms.

A balance transfer may involve processing fees, foreclosure or prepayment charges from the existing lender, and other applicable charges. The exact costs vary by lender and loan agreement, so compare all charges with the potential repayment savings before transferring.

The required number of paid EMIs depends on the lender and balance-transfer product. Some lenders may specify a minimum repayment period. Check your existing loan agreement and the new lender’s eligibility requirements before submitting a transfer application.

The timeline varies by lender and applicant. It depends on application processing, document verification, approval and settlement with the existing lender. Additional information or verification can extend the process, so check the lender’s stated processing timeline.

A balance transfer can affect your credit score because the new lender may make a credit enquiry and your existing loan may be closed. The impact depends on your credit profile, repayment history, account closure and subsequent repayment behaviour.

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