Home loan interest rates have been on a constant downfall and are currently at the lowest they have ever been. So, for those looking to buy houses this year, applying for a home loan is the right time. However, does this mean those who have taken housing loans a few years back have lost out on getting a good deal? Not at all! Going for a home loan balance transfer would help in getting new deals that lenders are offering in today’s market.
A home loan balance transfer involves the outstanding loan amount of the existing loan getting transferred to a new lender. The new lender will provide money to clear off the existing loan and open a new loan account for the same outstanding amount. Once the existing financial institution receives the remaining amount, they will provide all the property documents as well as a no-dues certificate. These documents will then have to be submitted to the new financial institution to which the loan amount has been transferred.
If you have not heard much about a home loan balance transfer and are looking to learn more about how it can help, take a look at 5 key benefits that this transfer can bring:
- Better terms
The terms of a housing loan will differ from lender to lender. By opting for a home loan transfer, inquire with the new lender regarding the terms they are offering. In order to entice borrowers to transfer home loans to their loan accounts, lenders do offer better terms. These terms could include lower monthly instalments, a more convenient repayment tenure, or even better customer service.
- Lower interest rate
One of the main reasons that most borrowers choose to go for home loan balance transfer is to get a better interest rate on their loans. This is because even a slight decrease in the interest rate can make quite the difference to the loan’s monthly instalments. Paying off the loan EMIs will get easier and result in more savings every month. So, it is always important to check with the new lender regarding the revised home loan balance transfer interest rate that they are offering. It is also advisable to make use of a home loan balance transfer EMI calculator to know the exact amount of the loan’s monthly instalments based on the new rate.
- Option of availing a top-up loan
By opting for a home loan transfer, you can also avail a top-up loan facility. The top-up loan amount can be used for any personal expenses. For instance, you could choose to paint the house, fund a trip, or pay for household expenses too.
Now that you are aware of the benefits, keep them in mind while discussing the possibility of a transfer with the new lender. Also, it is best to inquire about the documents required for home loan balance transfer. This is to ensure a hassle-free process of transferring the loan from one financial institution to another.