A Home Loan Balance Transfer is a big decision for those of you struggling with Home Loan repayments. You will know the struggles of repaying a loan, especially if the interest rates aren’t in your favor. Opt for a Home Loan Balance Transfer and make substantial saving in terms of the interest amount.
If you’re opting a Home Loan Balance Transfer, here are 10 tips about the process that you should know. Before that, let’s take a look at what a Home Loan Balance Transfer actually is.
Home Loan Balance Transfer
The process of transferring the existing Home Loan amount to a new bank or NBFC from your current lender is known as Home Loan Balance Transfer. The main reason for opting for such a loan transfer is lower interest rates.
If you come across any bank or NBFC offering you a lower Home Loan interest rate compared to your current lender, it’s better to opt for a Home Loan Balance Transfer. You’ll not only get to make substantial savings in the total interest payout, your monthly installment amount will also decrease. Plus, you can take a top-up loan from the new lender and use it for home improvement, holiday, or anything else that you want.
It’s difficult to ignore Home Loan Balance Transfers benefits and that is the reason, why it has become so popular these days. If you’re planning to transfer your Home Loan, here are some of the things to consider before transfer your Home Loan, it will make home loan refinancing easier:
Home Loan Transfer Tips
- When you’re considering a Home Loan transfer, make this clear to your current lender. This might invite a reduction in interest rates, as the bank/NBFC would like to keep you as an existing customer.
- Always remember the primary reason for transfer is a low rate of interest. Look at all your options and pick the one with the lowest rate of interest and the simplest Home Loan Transfer process.
- Always read the fine print. When it comes to matters of transferring transactions, it’s best that you know exactly what you’re getting into. You don’t want to buy in conditions more binding than your existing loan.
- Don’t underestimate the importance of a good customer service rating. Always review the previous performance of a lender you’re considering transferring the loan to. Consider having a look at their customer satisfaction rates.
- Your new lender must complete the prepayment of your existing loan amount at once. The Home Loan transfer charges for the same must be reasonable.
- Documentation cannot be taken lightly. Make sure you retrieve all originals from your old lender and make sure you submit them to your new lender timely. Also, ensure you have multiple copies of the same at hand all times. This includes address proof, ID proof, and even your bank statements.
- When moving to a new lender, don’t forget that you’re foregoing a lender that you have an existing relationship with. If you do all your banking with your current lender, you’ll be able to get a deal with of them. Moving to a new bank/NBFC means that you have to start from scratch. This means opening a new savings account. Consider the charges of this entire process as well. In most cases, you’re sure to make again.
- No Home Loan transfer can happen without prior approval from your existing lender. This will have to be presented in the form of a letter of consent to your new lender.
- Consider even other benefits you can avail from your new lender in the form of Home Loan top up or any other feature that makes the effort of transfer worth your time. This can be in also the form of easy prepayment and nil foreclosure charges and the like.
- When considering a Home Loan Transfer, have a clear idea of how much the outstanding loan amount is. The sooner in the tenure, the transfer happens, the more you will be able to save in EMI payments.
These are some of the things that you need to consider while opting for a Home Loan transfer. Ensure that you go in prepared and only opt for banks/NBFCs that fit your needs.