A home loan will help you achieve your dream of owning a home, but it requires you to make a long-term financial commitment of at least 15 years. For you, staying in debt for so long can be exhausting, so you opt for a balance transfer facility for a home loan. A home loan balance transfer lets you transfer the outstanding loan amount from the existing lender to another lender to lower your EMIs monthly and get better service.
How Does Home Loan Balance Transfer Work?
The new lender pays the unpaid amount to the original lender after the borrower (you) submits an application with the existing lender requesting a balance transfer, and the new lender accepts the takeover of the home loan.
The property documents are released, and a no-due certificate is issued to the borrower after the current lender receives the pending number. These documents are sent to the new lender, and until the process is completed, the borrower must pay the new lender all remaining future EMIs according to their interest rate policies.
Switching to a different lender, as appealing as it might be, requires careful consideration. Here you can make the best of use of the home loan balance transfer facility:
Lower The Interest Rate Leads To Lower The EMI:
The lower interest rate is one of the most compelling reasons to choose a home loan balance transfer. When you’re paying a higher interest rate on your loan and other lenders are offering lower rates, a balance transfer will help you save money by allowing you to move your loan to a new lender with lower rates. This lowers your monthly EMI even more, saving you a significant amount of money.
Get Better Terms On Your Loan:
The terms of the loans offered by various lenders vary. If you have a home loan with terms that aren’t favorable to you, switching your loan to a lender that offers the same loan at your preferred terms will help you out.
Foreclosure And Prepayment Charges:
In a 2012 mandate, the Reserve Bank of India removed foreclosure charges from home loans with floating interest rates. On the other hand, banks are free to charge a par-closure fee ranging from 2% to 4% of the unpaid amount on home loans with a fixed rate of interest. Borrowers who are paying a floating rate of interest and want to prepay or foreclose on their home should take advantage of this opportunity.
Better Customer Service
Through the balance transfer home loan facility, you can access better customer service features. You may get the best deals regarding loans and other perks offered by the new lender to its new customers.
Get A Top-Up Loan:
The addition of a top-up lending facility to a home loan balance transfer is an added advantage. When you make a balance transfer, you might be eligible for a bonus amount in addition to the amount you owe. Moreover, you can get a top-up loan at a low-interest rate and use it to pay off your current debts or even renovate your house. Even if the real estate price/market value of your home has increased, your current lender may not be willing to provide this top-up loan. Your new lender will almost certainly use the existing market value of your home as a benchmark and may offer a top-up loan.
However, there are a few things to consider before opting for a home loan balance transfer facility:
Make sure the remaining repayment period is less than five years.
Make sure you haven’t missed any EMI payments on your current loan.
Make sure you have all of the property-specific paperwork ready.
Most lenders also offer a Home Loan balance transfer option, which could make more sense in the early years of repayment because you will benefit from a lower interest rate for a longer period. Remember that, in addition to selecting the lowest Home Loan interest rate, you should also be sure that the deal provides no penalty for prepayment, foreclosure, or moving to another lender. Make a decision based on the amount of loan sanctioned (in comparison to another lender), paperwork requirements, and the expected period for disbursement.
Need home loan balance transfer facility? Contact the RupayLoan team today and apply for it. We can help you get the best deals on balance transfer coupled with a streamlined application process and minimum documentation. So, don’t miss this opportunity! Call us today.