Balance Transfer Loan – Everything You Need to Know

Updated on November 17, 2023
At a Glance: A balance transfer involves moving your debt from one lender to another, often transferring credit card debt to a card with a lower interest rate. It can be done to take advantage of a promotional zero-interest period or to consolidate high-interest debt. Alternatively, a balance transfer loan can be obtained from lenders like Stilt, especially for immigrants and visa holders, to transfer credit card balances. It’s important to manage the process carefully and avoid incurring new debt, while also maintaining good repayment habits and budgeting effectively.

Credit card debt often seems like an unmovable mountain. Especially if you have an interest rate that is completely unfavorable and almost unaffordable. How do you deal with growing credit card debt and is it even possible to get a better interest rate?

We have a solution for you! Below we take a look at balance transfer loans and how they can assist you in tackling your credit card debt.

What is a Balance Transfer and How Does it Work?

A balance transfer is simply moving your debt from one lender to another. In the case of credit card debt, you’ll be moving your debt from one card to another card which supplies a cheaper monthly rate and lower repayments. You do this by paying off one card with the balance available on your other card.

It’s important to only transfer your debt to a lender who supplies you with a lower Annual Percentage Rate (APR) and not only a lower interest rate. Some cards have a few hidden costs involved that you need to watch out for, such as:

  • Balance transfer fee: Usually a percentage of the balance being transferred.
  • Annual fee: A yearly fee for the activation of the card.

These costs will be included in the APR.

When You Should Consider a Balance Transfer

There are two scenarios in which you should consider a balance transfer.

Scenario 1: Credit Card Introductory Period Will End Soon

There are credit cards that have an introductory period. These periods have a zero interest rate and can be anything from 6 to 12 months. So, you can use the card without accruing any interest on your balance. When the introductory period ends, interest will start to accrue.

Often the interest that applies after the introductory period isn’t favorable and quite high. So, if you have one of these cards and the introductory period is about to end, a balance transfer is a very good option for you.

Scenario 2: Credit Card Debt is Out of Control

This scenario involves debt that is already out of control. You have an outstanding balance on a credit card with an interest rate so high you are struggling to keep up with the payments. You may even have multiple credit cards with overdue balances and the differing pay dates are confusing and difficult on your cash flow.

A balance transfer is a good option here where you can consolidate your debt to one card with a lower interest rate. You’ll also enjoy the benefit of having only one monthly payment.

Are There Options Other than Moving the Balance to a New Credit Card?

Credit cards often have minimum requirements. You may not be in the position of qualifying for another card right now. Or worse, perhaps you are an immigrant with limited access to financial services and credit in the U.S. What other options do you have?

A balance transfer loan is one of your best alternative options. For some, this might even your best option.

A balance transfer loan is essentially a personal loan you take out in order to transfer your credit balance. As an immigrant or visa holder, we know getting a loan, in general, can be tough – not to mention getting one to transfer an existing credit balance. Your lack of credit history or credit score prevents you from applying for many loan options out there. And some lenders simply prefer borrowing money to U.S. citizens and permanent residents.

The good news is there are lenders like Stilt who prioritize providing loans to immigrants and visa holders. Their loan process is tailored towards the needs of internationals and they also don’t have the requirements that generally pose obstacles to immigrants and visa holders.

Balance Transfer Loans with Stilt in 3 Simple Steps

Getting a balance transfer loan with Stilt is simple and easy. You can use your Stilt personal loan, with a lower interest rate and better monthly payments and repayment terms, to repay your existing credit card. Especially if you are an international. Let’s see how it works.

1. Apply

Go through Stilt’s eligibility criteria. Make sure you comply with requirements before you apply for your balance transfer loan. The good news is, you don’t need a minimum credit score to apply with Stilt. You can apply for your balance transfer loan online, which means you avoid long queues and endless paperwork.

After you’ve applied, you will receive feedback within 24 hours. A follow-up call may be scheduled with you to verify the last few details. Remember to provide as much info as you can and only supply info that is correct. The information you provide will determine the loan offer you get.

2. Get Your Funds

Once you’ve received your balance transfer loan offer, you can assess the exact terms. Make sure the APR is lower than the APR of your current credit card debt. Accept the offer by signing and returning the promissory note. The funds should be in your account within 2-3 business days.

Once you’ve received your funds, settle your credit card debt immediately. Remember, the purpose of a balance transfer loan is to repay your existing debt and moving it to your new lender.

3. Begin Your Repayment

Stilt has a great auto-pay option which makes repaying your loan easy. With auto pay, your monthly repayment is automatically deducted from your account each month. This ensures all your payments are on time every time.

4 Post-Balance Transfer To-Dos

Now you’ve sorted your credit card balance out and you have the advantage of a cheaper loan, it’s important to not get yourself into the same sticky situation. Here are a few things that will help you to stay out of trouble with credit cards.

Make No New Purchases

Now that you have settled your previous credit card debt, the credit card balance will again be available to use. Don’t use these cards, as you’ll be getting yourself into debt that you possibly can’t afford. Cut the cards if it’s necessary. Don’t repeat the bad cycle of spending that got you in trouble the first time.

Leave Your Old Credit Card Open

You can cut your cards if you need to, but don’t close the account. Your credit score is dependent on the credit utilization rate. Closing these accounts will lower available credit and increase your utilization rate. This can have a negative impact on your credit score.

Set Up Auto Pay for More than the Minimum Payment

Auto pay options help you to pay on time, every time. You don’t have to worry about confusing payment methods or dates. The electronic auto-pay option will do the work for you. It’s always a good idea to set up a payment amount that is more than the required minimum repayment. It affects your credit report positively when you pay more than what is expected. Just make sure your lender doesn’t have a prepayment penalty which could count against you.

Start Budgeting

In most cases, overspending is what gets people into a tight situation with their credit cards. So get out of bad habits by budgeting properly. There are countless apps and services out there ready to help out that will make budgeting easy and fun. Be the captain of your ship and steer it to financial safety.


You don’t have to be stuck with mounting credit card debt and interest any longer. Being an international is also no longer an excuse. Get a balance transfer loan from Stilt today, and start building your healthier financial future.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.