Looking to buy a new home in 2022? Fantastic! There are a few things you need to take care of before making a home loan transfer. You want to make sure you get the best rate possible so that you can save as much money as possible on your monthly payments.
But how do you make the best possible home loan deal for you? A home loan balance transfer might be the answer. Keep reading to find out more!
A home loan transfer helps provide better service as it allows the customer to port their home loan to a bank or housing finance company. This is useful if the customer is not satisfied with the service provided by their current lender.
In order to make a home loan transfer, the customer has to approach their new lender with the necessary documents. The new lender will then take over the processing of the home loan and the disbursement of funds. The entire process usually takes 4-6 weeks.
A home loan balance transfer is a convenient and beneficial option for customers who are looking for better service and lower interest rates.
Lowers Your Interest Rate
One of the most common reasons people choose to transfer their home loan balance is to secure a lower interest rate. If you’re paying a higher home loan EMI, transferring your balance to a new lender could save you a significant amount of money.
Additionally, a balance transfer can also help you pay off your home loan faster. When you transfer your loan balance to a new lender, you usually have the option to choose a different repayment period.
For example, if you have 20 years left on your current home loan, you may be able to choose a 15-year repayment period with your new lender. This would mean that you would make higher monthly payments but could save money on interest and pay off your loan five years earlier.
Better Loan Terms
A primary reason to opt for a home loan balance transfer is to take advantage of better loan terms. Mortgage rates fluctuate over time, and by transferring your home loan to another lender, you can get a lower rate of interest, enjoy a longer tenure, and even avail of additional top-ups.
This essentially means lower EMIs, which gives you greater financial freedom and helps you save money in the long run.
Apart from the obvious financial benefits, a home loan balance transfer also gives you the opportunity to change your lender. This could be due to poor customer service, hidden charges, or any other number of reasons. Whatever the case may be, switching to another lender could help improve the overall experience of your home loan journey.
Extended Loan Tenure
People choose to transfer their home loan to extend their loan tenure. By doing so, they can bring down their monthly EMIs significantly. This can be extremely helpful if you are going through a tough financial patch and need some breathing room. It can also be helpful if you want to free up some cash for other purposes, such as investing or going on a vacation.
Option to Change the Type of Interest Rate
A home loan transfer gives you the option of changing the type of interest rate. A balance transfer on a home loan means transferring your home loan from one lender to another. Many times we take a home loan at a floating interest rate, but after some time, the rates of interest start increasing. In order to avoid that, we can opt for home loan balance transfer offers which will help us fetch lower interest rates for the rest of the tenure.
At present, banks are offering home loans at both fixed and floating interest rates, so one can choose any type of interest rate depending on his/her convenience and repayment ability.
Top-up Home Loan
A home loan balance transfer helps with the option of getting a top-up home loan. With a top-up home loan, you can borrow a certain amount over and above your current home loan. The interest rate on a top-up home loan is much lower than that on a personal loan or a credit card.
Also, the repayment tenure for a top-up home loan is usually longer. Thus, it helps you save on interest payments and also allows you to repay the loan over a longer period of time, which is convenient for you. Moreover, with a balance transfer, you can also negotiate with your current lender for a better deal on your home loan interest rate.
This helps you save even more on interest payments. Therefore, if you are looking for ways to save on your home loan repayments, then a balance transfer is the way to go.
The reasons for a home loan balance transfer may vary from person to person, but the goal is always the same: to get a lower interest rate and save money. If you’re thinking of transferring your home loan in 2022, be sure to do your research first and use a home loan calculator to compare interest rates between lenders.
With careful planning, you can ensure your home loan balance transfer eligibility and save money in the long run.
We hope that now you are all clear about the benefits of a home loan balance transfer. If you want more information, you can read similar articles on the Piramal Finance website.