Loans · Calculator

Should you balance-transfer your loan?

Even a 1% lower rate can save you ₹2-5 Lakh on a 15-year home loan. But processing fees + foreclosure penalty + paperwork eat into the savings. See the actual maths — including breakeven months.

Outstanding loan amount

₹

Current interest rate

New offered rate

Remaining tenure

months

Switch costs

Processing fee on new loan

Foreclosure penalty (if any)

Other charges (legal, stamp, valuation)

₹

✓ Worth transferring

Net saving ₹2.5 L

Breakeven in 12 months — switch costs ₹17,500 recovered via lower EMI savings.

Current EMI

₹26,106

At 9.5% over 180 months

New EMI

₹24,618

At 8.5% — saves ₹1,487/month

Total interest saved

₹2.7 L

If you stay full tenure on the new loan

Switch costs

₹17,500

Processing + foreclosure + other one-time

When to transfer (rule of thumb)

✓Rate difference ≥ 0.5% AND remaining tenure ≥ 5 years
✓Breakeven happens in < 30% of remaining tenure
✗Don't transfer if < 3 years remaining (paperwork + lost time not worth it)
✗Skip if new lender's processing fee > 1% AND rate diff < 0.75%

Indian-context regulatory notes

•RBI rule: zero foreclosure penalty on floating-rate home loans for individuals (since Oct 2014). Penalty applies on fixed-rate or business loans.
•Personal loan transfers typically allowed after 12 months; foreclosure penalty 2-5%.
•Education loans (under govt scheme) — usually free balance transfer; check moratorium rules.
•Negotiate fees: processing fee is often waivable for HNI customers or via end-of-quarter sales push.

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Methodology disclosed

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