A balance transfer is a way in which all or a part of your debit balance or debt you owe to another lender is transferred from one card to another. This is done with a motive to save money on interest repayments. A good way to transfer balance is through the use of credit cards.  It helps to slow down and stock of your debt. This helps to keep track of your balance and payments.

A balance transfer is a way when a person pays off the existing balance of the card or loan by transferring them to another credit card or loan account. In some cases, this balance transfer includes a fee which is typically a small percentage. An important concept is to know that you cannot transfer all the amount on your new account. You can only transfer an amount up to your credit limit on the new card. For example, if your credit limit is Rs5000 on the new card and you wish to transfer a balance of Rs6000, you will only be able to transfer up to Rs5000.


  • The first step is to indicate who you want to pay, the account number of the respective person, and the amount you want to transfer.
  • Once this is indicated and you are approved for the transfer, the credit card company will contact your creditors on your behalf and transfers the amount you indicated. This process can take around 7-9 days.
  • To avoid late fees you need to make payments due before that time if you want to go further with this process.

Balance transfer fees

Balance transfer includes certain fees which vary from company to company. Usually, the fees amount to about 3% to 5% of the transferred debt. Certain provisions help you to have a 0% transfer fee for a limited period of time.

Benefits of transfer

  1. Balance transfer helps you to catch up on your existing debts. This is possible because of APR which helps you to get low promo to pay down the balance within a definite period of time.
  2. The second benefit is that it helps to reduce your debt within a limited time frame.
  3. Keeping a track of one payment a month is also beneficial by consolidating and combining all your balances onto one card having low transfer fees.

Types of balances to transfer:

  1. Store credit cards
  2. Gas cards
  3. Other credit cards.

Things to keep in mind before making a balance transfer

  1. Transferring and repaying are two different terms.

Both the terms transferring and repaying are used interchangeably. But in a real sense, they both are different. Transferring is paying off the amount of one credit card with a new credit card. Repayment, on the other hand, is paying back all the money from the same card from which the credit was taken.

  1. Simplifying your financial life.

Another thing to keep in mind is the reason to transfer balance is to simplify your payment and your financial life. In case of having multiple credit cards and the issue of remembering multiple payment dates, putting all your credit card debt on one card is a good move. Now you will have just one card for making payment and you have to remember just one payment date.

  1. Inevitable fees.

Transferring balance from a high-interest rate to a low-interest rate requires balance transfer fees. This fee is determined by calculating a percentage of the total amount you wish to transfer. In 2015, a typical fee was 3%.

  1. Not just credit cards

A balance transfer is not just limited to credit cards. You can also transfer loans for cars, property, furniture, and appliances.

  1. Good credit is required to qualify.

Before the recession, the cards having zero interest rates were widely available and used but became rarer day by day. If you qualify according to your good credit score you may be able to get good credit. There are several ways in which you can check your credit score and improve it. If you qualify to have a good credit score, it will help you to pay off your debt sooner.

  1. Always look for a card that offers you 0% APR period and 0 transfer fee.
  2. Never cancel your old card.
  3. Pay off your debt on time i.e. before your interest-free period is up.
  4. Don’t do a cardinal balance transfer.
  5. Your priority should be to pay on time every month.
  6. Have a clean credit history and a good credit score.
  7. Go by the rules and don’t look desperate.


Top up loan helps you to avail a loan amount on top of your home loan. The tenure for a top-up loan is usually 10 years.  The logic behind this is simple. The fact is that you have already started repaying your loan and hence your outstanding balance has already begun decreasing with each payment.

You can apply for a top-up loan when you have a home loan to top upon. Various banks have various conditions for this. For getting a loan you can approach the same bank from which you took your home loan or you can get it from some other bank depending upon various factors. Bank will only provide you with loans when you have a good and impeccable repayment record in the past. This type of loan also provides you with various tax benefits. Various factors will be considered before giving you a top-up loan.

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