Balance Transfer on Personal Loan? Here's How to Save (2026)

Struggling with high-interest rates on your personal loan can feel like a financial burden weighing you down. If you've ever wondered whether you can do a balance transfer on a personal loan to ease this burden, you're not alone. Many Australians are seeking ways to reduce their interest payments and manage their debt more effectively. This guide will walk you through everything you need to know about personal loan balance transfers and how they can potentially save you money.

Understanding Personal Loan Balance Transfers

A personal loan balance transfer involves moving the outstanding balance of your existing personal loan to a new loan with a different lender, usually at a lower interest rate. This strategy can help you save money on interest payments and possibly pay off your debt faster. However, it's crucial to understand the mechanics of how these transfers work and the conditions that apply.

Personal loan balance transfers are less common than credit card balance transfers, but they can still be a viable option if you qualify. The main goal is to secure a lower interest rate than you are currently paying. With interest rates on personal loans in Australia typically ranging from 6.49% to 12%, finding a lower rate can make a significant difference in your repayment journey.

Current Market Rates and Requirements

In 2026, personal loan interest rates in Australia vary depending on your credit score, loan term, and the lender's policies. Generally, personal loan rates range from around 6.49% for those with excellent credit, to as high as 12% for borrowers with less-than-perfect credit.

Eligibility criteria for a personal loan balance transfer often include:

• A good to excellent credit score (typically 650 or higher)
• Proof of a stable income
• Existing loan statements and proof of on-time payments

Below is a comparison of typical interest rates and fees from some of the lenders on Esteb and Co's panel.

Steps to Successfully Transfer Your Personal Loan Balance

If you've decided that a personal loan balance transfer is the right move for you, follow these steps to ensure a smooth process:

1. Evaluate Your Current Loan: Determine your current interest rate, remaining balance, and any prepayment penalties.
2. Research New Lenders: Use Esteb and Co's access to 83+ lenders to find competitive rates.
3. Calculate Potential Savings: Compare the total interest you would pay with your current loan versus a new loan.
4. Check Eligibility Requirements: Ensure that you meet the criteria for the new loan.
5. Submit an Application: Provide all necessary documentation and information to the new lender.
6. Review Loan Terms Carefully: Before accepting, ensure you understand all fees, rates, and repayment terms.
7. Complete the Transfer: Once approved, the new lender will pay off your old loan, and you'll begin repayments with the new lender.

Expert Tips and Considerations

Before proceeding with a balance transfer, consider these expert tips:

• Read the Fine Print: Ensure you understand all terms and conditions, including any hidden fees.
• Consider Loan Terms: A longer loan term can reduce monthly payments but may increase the total interest paid.
• Beware of Introductory Rates: Some lenders offer low introductory rates that increase after a set period.
• Maintain a Good Credit Score: A higher credit score can secure you better interest rates.

Frequently Asked Questions

• Can I transfer a personal loan to a credit card? Yes, some credit cards in Australia allow you to transfer personal loan debt, but this often involves higher fees and interest rates.
• Is a balance transfer always cheaper? Not necessarily. Always calculate the total cost, including any fees, to determine if it's cheaper.
• How long does a balance transfer take? Typically, it can take from a few days to a couple of weeks, depending on the lender's processes.
• Can I transfer a partially paid off loan? Yes, you can transfer the remaining balance of your loan.
• What happens if I miss a payment on my new loan? Missing a payment can affect your credit score and may incur late fees. Always aim to make timely payments.
• Can I transfer a loan more than once? While possible, repeatedly transferring loans can negatively impact your credit score and may incur additional fees.
• How do I choose the best lender for a balance transfer? Compare interest rates, fees, and terms across different lenders. Esteb and Co can assist with this decision through our extensive lender panel.