A home loan makes the process of buying a home easy. You can always find a home loan that has low interest rates along with other value-added services. The interest rate of the loan is a matter of great consequence to the borrower. Even a slight increase can disturb the finances of the borrower significantly. If you find that your home loan isn’t offering the best rate of interest, especially when compared with other home loans in the market then the smartest thing to do is carry out a home loan transfer to another lender, to benefit from the new loan’s terms.
When should you opt for home loan balance transfer?
Usually, you shift your home loan balance to another lender when you feel the rules of your current lender are unfavourable and are not ready to negotiate. However, you can have many reasons for transfer, but the main reason for balance transfer is high interest rate. This may be due to the presence of many other reasons such as stringent rules, a lot of extra charges and poor customer service.
It is best to transfer home loan balance in the initial years of your term. This is because initially the share of interest in each EMI is much higher than the principal. So, this is the time when you can get the most benefit by falling interest rates. Also, remember that for transferring the balance you may have to pay a fee to the new lender and pay the processing fee again. So, keep these numbers in mind, understand your total benefit and decide accordingly. This guarantees that your balance transfer will actually help you in saving.
Home Loan Transfer Benefits
1) Low Interest Rates
The main reason why borrowers opt for a home loan balance transfer is lower rate of interest offered by another lender.
2) Better terms in prepayment
Your new lender can provide additional benefits such as easy pre-payment and foreclosure at no extra charge. This makes repayment easier.
3) Better accessibility
Some banks offer online transfer making it easier for borrowers to complete the transfer process smoothly and without any hassel.
Your new lender can provide you with many additional features like top-up loans, which you can use for many reasons including renovation of your house.
To learn more about eligibility criteria and process of transferring the home loan, click here
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