Balance Transfer Savings Calculator
A lower rate does not automatically mean savings; this calculator nets foreclosure and processing charges to show your true gain and break-even point.
Fee-adjusted savings Break-even month RBI rules noted
Your existing loan
Outstanding principalRs. 5,00,000
Current interest rate16% p.a.
Remaining tenure36 months
Foreclosure charge on old loan3% (Rs. 15,000)
Balance transfer offer
New interest rate12.5% p.a.
Processing fee on new loan1% (Rs. 5,000)
Current EMI
Rs. 17,579
New EMI
Rs. 16,727
Switching charges
Rs. 20,000
Net saving
Rs. 10,661
Transfer makes sense. You save Rs. 10,661 over 36 months after paying Rs. 20,000 in charges. You recover the switching cost in roughly 24 months of the lower EMI. If you plan to prepay the loan before that, the transfer loses its edge.
KharchaUdhar Insider Tip Ask your current lender for a rate revision before transferring. Many banks will cut 100 to 150 basis points for a flat conversion fee of Rs. 1,500 to Rs. 3,500, which is far cheaper than a full transfer with fresh processing fees and foreclosure charges. Retention desks approve this more often than customers expect.
Assumes the same remaining tenure on the new loan. Floating rate personal loans have no foreclosure charge per RBI rules; fixed rate loans typically charge 2 to 5%. Indicative only.
KharchaUdhar Insider Tip Time your transfer by loan age, not by rate alone. In the first third of the tenure most of your EMI is interest, so a 2 to 3 point rate cut saves real money. In the last third the same cut often cannot recover even a 1% processing fee. Run the numbers before the retention desk calls you back.