Many people think that as soon as you get a lower interest rate, you should just switch your home loan. However, that’s not the case.
Lower interest rates do influence the transfer decision, but there are other factors too that should be considered while determining the time for a home loan balance transfer.
Following are the ideal scenarios are a home loan balance transfer:
2. Cost and terms involved
Just transferring your home loan every time there is a rate cut is not an option.There are strings attached with a home loan balance transfer, like the cost of transfer and the terms of transfer. Analyze the costs and the terms very carefully. If you are not happy with your existing lender, switch your home loan.
How to decide: Settle for the lowest transfer costs and friendly terms. Here at Bajaj Finserv an online Home Loan Balance Transfer from other lender can be disbursed in less than 4 days. Consider such fringe benefits.
3. Longer loan tenor
Switching your home loan is advisable if the outstanding loan tenor is longer. If you are approaching the end of your home loan in 1-2 years, it will not make much sense to transfer your home loan. As, the cost involved in transferring your home loan might exceed your savings with the new lender.
How to decide? If the home loan is for 20 years, you can consider switching the home loan up to 16 to 18 years. Avoid transferring the loan at the far end.
Additional Read : Everything you need to know about home loan balance transfer
4. Higher outstanding loan amount
It is advisable to transfer a home loan when the outstanding loan amount is higher. The EMIs of the home loan are made up of principal amount and the interest amount.
As the loan matures, the principal amount gradually gets paid, thus reducing the outstanding loan amount.
How to decide:Decide on the basis of outstanding loan amount. Transfer your home loan if a good chunk of home loan is outstanding and you are getting a better deal from another lender.
5. Property authorisation
One important factor would be to check in advance if the new lender has approved your property for a home loan. Each lender has their different approval lists and procedures.
How to decide: In most of the cases, a lender will approve your home loan if the property is undisputed and built by a credible builder. Still, check with them for your property authorisation.
Conclusion
The above-mentioned factors will help you decide the right time for transferring your home loan. With online procedures for home loan transfer in place, the hassle has come down drastically. Follow these 5 easy steps to do a home loan balance transfer today!
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