Balance Transfer Savings Calculator
Find out if switching your loan to a cheaper lender actually saves money once processing fees are counted. See the new EMI, net savings over your remaining tenure, and the exact month you break even.
Balance Transfer Savings Calculator
Before you switch lenders
- Get the competing offer in writing — your current bank's retention desk often matches it for a token fee
- Negotiate the processing fee; for prime borrowers most lenders will cap or waive it
- Keep the tenure the same after transfer and pocket the EMI difference — extending tenure can erase the savings
- Time it early: a transfer in year 3 of a 20-year loan saves far more than the same transfer in year 12
Balance transfer FAQ
What is a loan balance transfer?
A balance transfer moves your outstanding loan from your current lender to a new one offering a lower interest rate. The new lender pays off your old loan and you repay the new lender at the cheaper rate. It's most common for home loans, where even a 0.5% rate cut on a large balance saves lakhs.
When is a balance transfer worth it?
Three conditions: (1) the rate gap is at least 0.35–0.5%, (2) substantial tenure remains — 7+ years for home loans, since savings accrue over time, and (3) the switching cost (processing fee + legal/valuation charges) is recovered within 12–18 months. This calculator computes the exact break-even month for your numbers.
What does a balance transfer cost?
Typical home-loan transfer costs: processing fee of 0.25–1% of the outstanding (often capped at ₹10,000–₹25,000 and negotiable), legal and valuation charges of ₹5,000–₹15,000, and stamp duty on the new mortgage deed in some states. Personal-loan transfers usually charge 1–3% — plus a foreclosure fee on fixed-rate loans.
Is there a penalty for leaving my current lender?
Not on floating-rate loans — RBI prohibits foreclosure charges on floating-rate loans to individual borrowers. Fixed-rate loans can carry 2–4% foreclosure penalties, which usually kills the math. Check which type you have before applying.
Should I negotiate with my current bank before transferring?
Always. Banks have a retention desk: show them a competing sanction letter and ask for a rate conversion. Most will match or come close for a small conversion fee (₹3,000–₹6,000), which beats a full transfer's paperwork and cost. Transfer only if they refuse.
Does a balance transfer affect my credit score?
Mildly and temporarily. The new lender makes a hard enquiry (small dip) and a new account appears while the old one closes. Pay the first few EMIs on time and the score recovers within months. The interest saved almost always outweighs this.