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Home Loan Balance Transfer – When Should I Consider Doing This

By Finserv MARKETS - Jul 31,2019
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When Should You Consider Home Loan Balance Transfer?

Investing money in buying or constructing a home is a decision of a lifetime for most of us. It is a costly affair for which it is difficult for us to cover with a single payment due to the high cost of housing. It is for this purpose we opt for home loans to get our dream home and repay the money borrowed in the form of monthly installments or EMIs. Now, it is more than likely that you would do your due diligence and research for the best interest rates and services before applying for the loan. However, lending rates often change with the market condition. Even if you have a floating-rate home loan, the lender may not lower the interest or may not reduce it enough, which means new loans are available at still lower rates.

In such condition, home loan balance transfer becomes a viable tool. The tenure of the home loan is high and thus, if you come across any lender that can offer the loan at considerably low rate of interest, then you can reduce the home loan burden to a greater extent. For example, when you opt for a balance transfer process at Finserv MARKETS, the entire unpaid principal amount of the loan is transferred from the existing bank to us. This brings us to the crucial question – how can a home loan transfer benefit you?

Lower interest rates and reduced EMI

A higher rate of interest means a heavier chunk of your income is being eaten away by your home loan EMI every month. With a home loan balance transfer, you can avail the benefit of lower interest rates and reduce the total interest payout on your balance loan amount. The loan balance transfer from Finserv MARKETS offers lower interest rates than what it was a few years back – so, continuing to pay at the old rate is a sheer waste of money. The reduced rate will lower your EMI considerably, which can accrue to considerable savings over the remaining tenure of your existing loan.

Save on the prepayment charge

Till a couple of years back, most banks used to charge a fee against every prepayment but this has largely become a thing of past by now. However, if the string of the prepayment charge is still attached to your existing home loan, it is high time for you to change your lender and move on to a new one. You can save a good amount of money for all prepayments to be made in the future.

Get better offers

A home loan balance transfer can provide you with other benefits too, apart from just saving money. While moving on with the new lender, you may negotiate with them to avail better services and offers in terms of top-up requirements and other investment options. Sometimes, the anticipated costs involved in buying or maintaining a property go up significantly. If something like this happens, you might want to top-up your loan to be able to renovate your home or meet other needs. If your lender doesn’t offer top-ups, you can consider switching to Finserv MARKETS, which offers the same without any additional documentation. In fact, something as simple as being dissatisfied with the services provided by your bank is also a good enough reason to switch.

So, if you are considering home loan balance transfer, there are some other things that you should keep in mind. If you can, always switch early on during the tenure as it would mean that you are able to save more. Get acknowledgements from your existing lender for the documents that are to be sent across and remember that a loan switch may not be possible if you have an irregular history of loan repayments. Also check for whether your home loan balance transfer eligible for pmay subsidy.

Home loan balance transfer offers numerous benefits to a borrower, but this decision should be taken only after due consideration of all the aspects pertaining to the loan. Therefore, do your due diligence before you go for it. With the help of home loan balance transfer from Finserv MARKETS, you can even repay the loan in relatively decreased tenure if you are able to manage and execute proper financial planning.

“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522