A business loan refers to a specific loan specially taken to fulfill the needs of one’s ongoing business. The loan is given by banks and NBFCs at attractive interest rates and for longer tenures. The tenures range from 1 to 4 years. The interest rate for business loan balance transfer starts from 15%*. Each bank and NBFC offering a business loan has their own specific eligibility criteria and required documents list as per their policy requirements.
You can choose a bank or NBFC for business loan as per your needs and the one which offers you lowest interest rate in the market. But many times this happens that after a specific period into the loan, you may realize that there is some other money lender who is offering the same loan with lower interest rates than yours’ with exciting loan terms. Here you have the option to change your loan from one bank to another to avail the said benefits. But there are some things to consider before you take such a major decision:
- Talk To Your Existing Loan Provider
Before you go for a business loan balance transfer, do not forget to talk to your current money lender. There is a chance that the current loan provider may offer you lower interest rate or some other benefits to stop you from getting loan transfer.
- Know The Processing Fee
Banks and NBFCs charge you when you decide to transfer your business loan balance. This processing fee is different from bank to bank as per their policies. But they usually charge around 2%* of the remaining loan amount which you want to transfer as the processing fee to transfer business loan balance. The charges changes as per when you are opting for the transfer. If the transfer is done in the early stage of the loan repayment, the fees are high; whereas if you opt for a transfer in the later stage of loan repayment, you might have to pay lower processing fees.
- List The Documents Required
When you decide that you will go for your business loan balance transfer, you need specific documents to complete the procedure. You’ll need to submit all the documents you submitted at the type of applying for the business loan with your 1st lender. Along with that you will also require the loan sanction letter given by your 1st lender.
- Check The Profit Ratio Of New Lender
When you leave your current lender and opt for a new one, make sure that the new deal is a profitable one. The new deal should provide you low interest rate but make sure it does not increase your tenure; otherwise it will be a bad deal. Also the processing fee should burden your loan. So if the new deal is by any chance the same or doesn’t make meaningful profit for you, don’t go for it!
- Compare Your Options
Always compare your options before going for business loan balance transfer. You may or may not have compared your options previously while taking the business loan at first. But here make sure that you compare all the available options to choose right. Here Ruloans helps you best by offering you best offers as per your eligibility from a plethora of banks and NBFCs.
- Read The Fine Print
Before signing and making your business loan balance transfer official, make sure you read the fine print. Reading the fine print basically means reading the whole legal document carefully. There might be some terms and conditions in there which you will agree to by signing only to regret later. So make sure that you read the document before signing.
Check your eligibility here and opt for a business loan balance transfer today!