Every time you try to find out some information about Personal Loans, you are simply bombarded with so much of information that you really don't feel like sifting through all of it. So, let's take it one step at a time and try to understand with clarity the various aspects related to Personal Loans.

This article particularly deals with knowing and understanding the difference between a Balance Transfer (BT), Top-up and a parallel loan.

Apart from availing loans for personal uses, or for buying a new home, there are always other needs that arise. For instance, when you purchase a new apartment, you might be forced to purchase a parking lot to park your car. This might not be expected at the time when you avail the actual home loan, which is why a top-up loan will be of great use.

Now, here's another situation where a balance transfer will come in handy: you have availed a home loan with a floating interest for tenure of 15 years. However, after 5 years of paying your EMI, you come across another bank that allows you to transfer your current outstanding loan to their bank at an interest rate that is lower than your current interest rate. Now, isn't that convenient?

When you have availed an unsecured loan, and there's suddenly a further need for some more money for a different purpose. You can very well avail a parallel loan. The benefit here is that you will be paying two separate EMIs and at different interest rates, this will not hinder your existing loan.  There are also chances of avilaing attractive interest rates once you have a postive repaying record!

The following information should give you some clarity and help you decide the type of facility to choose

 What is it?

BT: Transferring the outstanding value from your existing loan from one bank to another

Top-Up: When you avail a loan, but not the maximum value you're eligible for. You may avail the remaining loan amount at a later time.

Parallel Loan: You may avail a loan parallel to your existing loan.

 

Interest rates

BT: Better interest rates than your current loan.

Top-Up: Same interest rate as your current loan.

Parallel Loan: Different Interest rate than your existing loan.

Eligibility

To be eligibile to avail either of these facilities, you will have to prove your ability to repay. After paying the specified number of EMIs as put forth by the bank providing your existing loan.