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13 APRIL, 2022
Before you avail a home loan, it is crucial to know about it thoroughly. With only complete awareness about the product, can you make an informed decision while applying for one. You might know the benefits of home loans for your dreams and the steps to avail them. However, it would be useful to further know the ways to reduce your loan obligation and interest rates. One of the best ways to reduce your interest, according to experts, is to opt for a balance transfer. With the balance transfer facility, you can switch your loan from one lender to another or restructure your loan as per your financial comfort. The home loan refinance option helps you save on your interest while you are already servicing a loan. However, it is crucial to know the amount of savings before you switch your loan. A home loan balance transfer calculator can help you.
What is a balance transfer?
Balance transfer facility helps you transfer your loan from one lender to another. Typically, the new lender pays off the outstanding loan amount and then you can repay the remaining loan at the new interest rates. By refinancing your loan with a new lender, you can get lower interest rates and save on the interest outgo. You can also restructure your loan to change your tenure. In addition, you can get additional facilities like top-up loans and better services with the new lender by loan transfer.
However, a balance transfer loan is similar to a new loan with respect to all the formalities, fees and documentation. Therefore, you must consider the following factors while opting for refinancing.
What is a balance transfer calculator?
A balance transfer calculator is an online tool that helps you determine your savings instantly. With this calculator, you can decide if you should transfer your loan. By providing your current and new loan details in the calculator, you can find the new EMI and the total savings from the transfer. You can use the calculator with the following steps:
The calculator will display the total savings and new EMI by the home loan balance transfer.
While you use the calculator, also consider the charges of the new loan. Without considering the charges, you might not be able to decide on the refinance. If your savings are significant, you can opt for refinancing. If not, it would be best to avoid transferring your loan.
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