A business loan balance transfer can be defined as a loan through which you can integrate multiple loans under the terms and conditions of one. Businesses mostly go for a business loan balance transfer to avail of lower interest rates and a better loan amount. This way, they can reduce their repayment burden and avoid any default pattern. A business loan transfer depends on the interest rates of the two loans, their remaining amounts, and tenure. Most lenders, banks and NBFCs provide the option of business loan transfer provided that the business has been making regular payments and has no history of defaults.
Business Loan Balance Transfer
A company/firm may avail of a business loan balance transfer to reduce the EMI repayment burden. Startups and MSMEs can also opt for it via a small business balance transfer. By opting for this feature, businesses can build working capital while also ensuring lower EMIs. The Urban Money Business Loan Balance Transfer Calculator enables you to consider various factors to aid you in deciding to transfer your business loan balance.
In the age of digitisation, a business loan balance transfer process is quite fast and easy, provided that you have a valid identity, address, income and business documents. After applying for a business loan balance transfer online, the lender verifies all the data you have provided them and helps you transfer the remaining balance to the bank. At the same time, they pay the same amount to your former lender. When your repayment tenure begins, you pay monthly EMIs to them for that particular loan amount at lower interests.
However, bear in mind that in a business loan balance transfer process, your credit score is also checked apart from the validity of your documentation. So, ensure that you have a credit score above 700 for faster business loan BT transfer approval.
Business Loan Balance Transfer Benefits
Given below are some of the benefits of a business loan balance transfer:
Lower Interest Rates
A business loan balance transfer allows you to transfer your remaining loan balance to a bank charging a lower interest rate. This means that you can enjoy a reduced repayment burden due to lower interest rates.
By opting for the business loan transfer option, you can lower the interest rate applicable to your monthly loan payments, culminating in lower EMIs. Even if you are a startup or an MSME, you can create a lot of savings for yourself with the help of a small business balance transfer. This way, you can save huge amounts of money for your other business expenses.
Sometimes other lenders offer you better terms and conditions with respect to waivers, processing fees, last EMIs, etc. You may also find lenders offering you better services and can apply for a loan balance transfer product that is better suited to your needs.
How to Use Urban Money Business Loan Balance Transfer Calculator?
The powerful AI backed Urban Money Business Loan Balance Transfer Calculator requires minimal entries to estimate your business loan transfer eligibility correctly. All you need to do is enter certain information about your current loan along with some other details mentioned below:
- Your current bank name
- Remaining tenure and loan amount
- Current applicable rate of interest
- Current equated monthly instalments
Click on the calculate button to estimate how much money you can save with a business loan balance transfer.
Factors Affecting Business Loan Balance Transfer
Given below are some of the factors that can affect your business loan balance transfer:
Equated Monthly Instalments (EMIs)
People usually choose to opt for a balance transfer to a new loan provider when they get lower interest rates. However, it is important to know that the new loan provider has agreed to the initial loan tenure while transferring the remaining business loan balance. An extended loan tenure may lead to a higher repayment amount, which might be detrimental to the whole cause.
Processing Fees and Charges
When you opt for a business loan balance transfer, there are chances that the new lender might charge a processing fee. This might be higher than the processing fee being charged by your previous lender. In this case, you might want to make sure that the additional costs do not add up to an extra repayment burden.
You should always ask the new lender about additional discounts and offers while opting for a business loan balance transfer. Availing such offers or discounts can lower your EMI payments and significantly reduce the repayment burden.
Terms and Conditions
Before signing the business loan balance transfer agreement, it is a good idea to read all the associated terms and conditions very carefully. Ensure that you get all your doubts and questions addressed to be aware of any hidden clauses that might affect your repayment plan.
In case you do not have a bank account with your new lender, there is a possibility that you might be asked to open a new bank account for a business loan balance transfer. This might add to the total cost of the loan. So it is recommended to transfer your loan balance to a bank where you already have an account.
Comparison of Business Loan BT Interest Rates in Top Banks/NBFCs
Given below are the business loan BT interest rates offered by some of the leading banks and NBFCs in the country:
|Name of the Bank||Interest Rate||Loan Tenure|
|ICICI Bank||Upto 17.00% p.a.||Up to 7 years|
|HDFC Bank||11.90% p.a. to 21.35% p.a.||12 months to 48 months|
|Kotak Mahindra Bank||16% to 19.99% p.a.||24 months to 5 years|
|IndusInd Bank||13.00% p.a. to- 22.00% p.a.||12 months to 5 years|
|Axis Bank||Starting at 17% p.a.||12 months to 5 years|
|State Bank of India||11.20% p.a. onwards||12 months to 48 months|
|Bank of Baroda||14.10% p.a. onwards||12 months to 36 months|
|Indian Overseas Bank||10.80% p.a.||12 months to 5 years|
|Lender||Rate of Interest (p.a.)||Tenure for Repayment|
|HDB Financial Services||16.75% p.a. onwards||12 months to 4 years|
|India Infoline||1.5% to 2.5%||12 to 36 Months|
|Mahindra Finance||Contact lender for information||Up to 3 years|
|Tata Capital||19% onwards||Upto 36 months|
|Aditya Birla Finance Limited||14%||12 months to 3 years|
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Frequently Asked Questions (FAQs)
How would I know which balance transfer is right for me?
You can determine which business loan balance transfer is right for you by comparing interest rates, processing fees, and loan tenure. You can see how much money you will save with each option and determine which one is best for you.
Does a balance transfer help in improving credit reports?
A balance transfer can help in improving your credit report if availed only once. However, multiple business loan balance transfers can hamper the credit report.
What documents are required for a business loan balance transfer?
If you wish to apply for a business loan balance transfer, you will be required to submit a set of identification documents, address documents, income proof, and business identity proof.
How much time will a bank take to transfer the balance?
Depending on the application, the bank might take 15-20 days to transfer the balance to the new loan account.
How is a balance transfer beneficial?
A balance transfer is beneficial to the consumer as you can get lower interest rates and reduce the repayment burden.