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Why Should You Be Choosing a Home Loan Balance Transfer?

  • Highlights

  • Lower your interest rate and EMIs

  • Get better repayment terms

  • Get better loan account service

  • Get a top-up loan for your other needs

A home loan balance transfer is when you transfer your unpaid home loan amount to another lender to lower your monthly EMIs. This is done when the borrowers find lower interest rate being offered by a new lender.

How can a home loan balance transfer benefit you?

A home loan balance transfer can be a profitable deal if you meet certain requirements. Most experts suggest a cost-benefit analysis before transferring your home loan to another lender.


Here’s how you can make the best use of a home loan balance transfer feature:

1. Lower your interest rates and EMIs

The most common reason for any home loan balance transfer is lower interest rate. If a new lender offers an interest rate which is lower than your existing lender, it can definitely be considered. Lower interest rate will result in lower home loan EMIs, thus, reducing your monthly burden.

2. Better repayment terms

Each lender has different terms and conditions attached to a home loan. If you get a better deal in terms of repayment of the home loan, a balance transfer would be a good choice.


3. Foreclosure and prepayment charges

These are two most important charges associated with any home loan. Lenders usually charge you if you foreclose or prepay your home loan before your decided loan tenor. This is an important factor while doing the cost-benefit analysis for your home loan balance transfer.

Additional Read : Everything you need to know about home loan balance transfer

4. Top up loans

Home loan balance transfer comes with few direct and few indirect benefits. Lower interest rates, lower EMIs, and better repayment terms are few benefits which directly reflect the decreased loan cost. However, lenders offer a few indirect benefits if you transfer your home loan to them.
Top up loan is a facility that provides additional home loan amount in case you need extra money. It comes as an affordable and a faster solution compared to other lending options.

6 Things to Remember for First Time Home Buyer

5. Preapproved offers

Lenders come up with schemes and discounts to attract borrowers from time to time. As a borrower you can use the right window to transfer your home loan.

Conclusion

Home loan balance transfer is advisable in initial years of your home loan as it can help you get the benefit of lower interest rate for a longer period. It is an option which most of the lenders offer these days. However, be very cautious while transferring your home loan.
Remember, you shouldn’t transfer your home loan every time you come across a lower interest rate. Do a cost-benefit analysis and make a smart move.

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