A Home loan balance transfer refers to the transfer of your current home loan from one bank/lender to another to lower your EMI by availing a lower interest rate and other benefits offered by them. Higher interest rates impact finances directly and can deter your monetary growth. In such circumstances, opting for a Home Loan balance transfer can help save a lot of money. With the recent dip in interest rates, the home loan interest rates have dropped to an all-time low.
Are you still paying home loan EMI on the previous rate? It’s time you should consider a home loan balance transfer.
A few things that you need to ensure before proceeding with a balance transfer are:
You may consider a home loan balance transfer to a bank or other lender offering a lower interest rate, if you’re currently paying a higher interest rate.
For the transfer process initiation, you need to go through the documentation process, as described below:
The home loan transfer process is now complete.
There are numerous benefits associated with a home loan balance transfer, as listed below:
The main reason for opting for a home loan balance transfer is the reduction in interest rate. It also helps to reduce your EMI and hence helps to save a good amount of money.
Banks/lenders usually vary with the terms that they offer for the loan provided. Sometimes, it so happens that you might have settled for a home loan in a hurry with terms not suitable to you; in such a scenario, you can consider a transfer with lenders offering better terms.
Foreclosure and prepayment charges are the two important charges associated with home loans that lenders often charge you. Although RBI in 2012 had lifted foreclosure charges on home loans that are on the floating rate of interest, charges do apply to home loans at a fixed rate of interest. But if you have taken a loan at a floating rate of interest, you can consider a transfer. All these factors must be considered while doing the cost-benefit analysis before a home loan balance transfer.
An added benefit of it is the top-up loan facility. On opting for a balance transfer, you are entitled to some additional amount as a top-up amount apart from your outstanding amount.
A home loan balance transfer is available with most lenders nowadays, and they try to lure customers with various attractive offers and interest rates. Go through the terms and conditions of the new bank properly to avoid any hidden expenses. You should also be very cautious, consider all pros and cons, and carry out a cost-benefit analysis before going ahead.
Visit our site if you are interested in applying for the balance transfer from your existing loan to one with Piramal Capital & Housing Finance.