Car loans are often the go-to financing solution for buying a car that you desire. However, over the course of the car loan tenure, you may come across a different lender offering better terms. In this case, transferring your car loan to a new lender may result in a better benefits, for instance, reducing the cost of borrowing.
Bajaj Finance not only allows you to transfer your existing car loan but also provides you with a high-value top-up loan of up to Rs. 52 lakh.
However, before opting of a car loan transfer, you must consider these four factors to determine whether transferring your car loan is the right decision for you:
1. Interest rates
The interest rate charged on your car loan determines the cost of taking out the loan. Transferring your balance to a new lender with a low interest rate can be beneficial if you are paying a high-interest rate on your current car loan. Even a seemingly insignificant reduction in interest rates over the loan's term can result in significant reduction in cost.
A Bajaj Finserv Car Loan Balance Transfer is available with competitive interest rates starting at 10% p.a.
2. Fees and charges
When considering a car loan balance transfer, it is important to read the terms and conditions carefully of both lenders. Certain banks and NBFCs levy a foreclosure fee when close your loan before its tenure ends. Furthermore, your new lender may also levy a processing fee to process your new loan. Keeping these aspects in mind, it becomes crucial to evaluate in depth the actual benefit you are likely to get. As a norm, the reduction in interest payable has to be higher than the additional charges you may have to pay for foreclosure of the existing loan and processing the new loan.
Once you have carefully examined all the costs and decided whether transferring your car loan is beneficial, you can proceed with transferring your car loan to the new lender.
Additional read: Important questions about car loan refinancing
3. Top-up loan amount
Some lenders also provide you with the option of getting a top-up loan amount when you transfer your car loan to a different lender. This feature allows you to borrow additional funds in addition to your current loan amount.
Bajaj Finance not only allows you to transfer your existing car loan, but also offers a high-value car loan balance transfer and top-up of up to 190% of the car’s value with a limit of Rs. 52 lakh.
4. Loan features
The loan features associated with your car loan determine the long-term impact of the loan. For example, if your lender imposes prepayment charges which further limit your flexibility, opting for a car loan balance transfer can be a viable option for you.
You could choose a Bajaj Finserv Car Loan Balance Transfer and Top-up and take advantage of our Flexi facility. Customers who choose one of the two Flexi Loan variants – Flexi Term Loan or Flexi Hybrid Loan – receive a pre-assigned loan limit from which they can withdraw funds as needed. The interest is only levied on the amount withdrawn, not on the entire limit. Customers can also part-prepay as many times as they want without incurring any additional fees. Furthermore, a Flexi Hybrid Loan gives you the option of paying interest-only EMIs for the initial part of the tenure.
Ultimately, the key to determine if a car loan balance transfer is the right choice comes down to doing your research and making an informed decision. Prioritise your finances by evaluating all aspects of your current and future car loan and ensure that your decision is in line with your repayment capacity.
Follow this link to learn more about the features of our car loan balance transfer and top-up services.
