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21 MARCH, 2022
Experts believe there are many ways to reduce your home loan interest rates, like paying a higher down payment, opting for shorter tenure, having a high credit score, opting for a joint home loan, etc. However, with a home loan balance transfer, you can reduce your interest rates mid tenure. It is an ideal means to restructure your loan and get better deals.
If you are paying a high EMI on your home loan, try opting for a home loan balance transfer. Scroll down to know more.
What Is a Home Loan Balance Transfer?
A home loan balance transfer is a facility wherein, you get the option to switch your loan from one lender to another. Through the balance transfer facility, you can refinance your loan to get better interest rates, convert floating to fixed interest rates, get pre-approved offers and additional facilities. To transfer the loan, you need to request your existing lender to close the loan. Once you apply for a new loan and pay the transfer fee, the new lender will pay off your existing loan. Now you can pay the remaining loan to the new lender at their interest rates and terms.
What are the benefits of a balance transfer?
By transferring the home loan, you can get lower interest rates and reduce your EMI. Your improved credit score is one way that can make you eligible for lower interest rates. A reduction in interest rates can reduce your cost of borrowing and help you save money.
You can restructure the loan by reducing or increasing the tenure with a home loan refinance. You can also switch your loan from floating to fixed interest rates and vice versa. If there is a change in the benchmark rates, you can also transfer your loan to opt for the new benchmark rate, for example, shifting to RLLR from MCLR.
If you are unhappy with the services of your lender, a home loan balance transfer can help you. You can enjoy the better services of the new lender and get facilities like top-up loans, doorstep services and pre-approved offers.
Things to Keep In Mind While Opting For a Balance Transfer
You must keep the following aspects in the mind before opting for a transfer balance:
While a transfer balance can help you save money on interest, you would need to go through the entire process of loan application and documentation. Therefore, it is best to do a cost-benefit analysis to ensure that you save a substantial amount before switching your loan to another lender.
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