Refinancing a personal loan is just like a traditional home loan refinancing prevalent in the financial market. Personal Loan Refinance is available for borrowers who would like to find options to repay their debts in a more cost effective manner. There are many types of refinancing available such as personal loan refinance, auto loan refinance, home loan refinance, student loan refinance and many more.
Refinancing a personal loan can be a great option if you are looking for ways to manage your monthly EMI burden and want to get a lower interest rate. Just like a home loan refinance, personal loan refinancing covers the total outstanding loan amount that you currently have left in your existing personal loan to pay. You can then use that money to pay off your current loan. While you will still have the same outstanding unpaid loan to pay, the lower interest rate and the lower fees/charges involved can help you save some money every month.
Refinance for any type of loan would also involved your credit report being run by the bank you choose to borrow from. The refinance amount may be determined on a number of factors such as your credit score, your repayment history, etc.
Here are some benefits of a personal loan refinancing:
Get a lower interest rate-
Personal Loan Refinancing is done when you can get a chance to avail another loan at a much lower interest rate. A lower interest rate will lower the amount you need to repay every month.
Save on your monthly EMI –
When your monthly budget is tight and you are finding trouble making ends meet, a personal loan refinance can be a saving grace as it can drastically reduce the amount you need to repay monthly.
Increase or reduce the loan term –
You can also choose to repay at a longer or a shorter-term period as per your convenience.
Get an additional loan –
Refinancing can also help you get extra money by going for a higher loan amount than the outstanding loan amount. Banks have special schemes in places that allow lender additional loan offerings.
Handle debt responsibly –
A personal loan refinance can help you to manage debts in a better manner as you will have access to extra money that you can use towards your savings or to repay other debts.
If you find a great refinance option that is offering a lower interest rate, amongst other factors, there are a few things you must keep in mind about the refinance process. It is a good practice to evaluate the prepayment options for your existing personal loan,check any penalties, processing fees, prepayment options of the new bank, etc., before going forward with the process.
There are a number of banks that offer balance transfer for various loan products that can help you manage your EMI and interest rate. At some occasions, you may also receive a Top Up on the outstanding loan amount that can help you with extra cash. The loan tenure can also be revised and increased upon request, however that certainly increases the interest rates.
Letzbank has partnered with many banks that offer personal loans with also an option for a balance transfer of your existing personal loan.
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