Question 1

What is a loan balance transfer?

Accepted Answer

A balance transfer moves your outstanding loan to a new lender offering a lower interest rate, so you continue repaying the same balance but at reduced cost. It is common for home loans and can apply to other loan types too.

Question 2

What costs should I weigh against the interest savings?

Accepted Answer

Balance transfers usually involve a processing fee charged by the new lender, and sometimes other charges from the old lender for foreclosure. This calculator nets the transfer fee against the interest saved to show your real benefit — a transfer only makes sense if that net figure is positive.

Question 3

How much of a rate difference is worth transferring for?

Accepted Answer

It depends on your outstanding balance and remaining tenure — larger balances and longer remaining tenures make even a small rate difference worthwhile, while small balances or short remaining tenures may not justify the transfer fee for the same rate gap.

Question 4

Does a balance transfer affect my credit score?

Accepted Answer

Applying for a balance transfer typically involves a fresh credit check by the new lender, which can cause a small temporary dip in your credit score — usually a minor consideration compared to the interest savings on a large, long-tenure loan.

Balance Transfer Savings Calculator

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What is a Balance Transfer Savings Calculator?

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