Buying a home is every individual’s dream and making it a reality takes years of hard work and dedication. Most individuals buy a home only after getting a home loan. Paying off the home loan is also a journey in itself; as the interest rate is comparatively higher than other loans and it takes years to get to the principal amount. So, a lot of people during the course of their home loan, switch lenders if they find a better interest rate.
What is a home loan balance transfer?
A home loan balance transfer is the process of transferring your home loan from one lender to another. In this process, the new lender pays off the outstanding loan amount to the old lender and the borrower has to start paying EMI to the new lender in the revised interest rate. But before you switch lenders there are a couple of pointers that you should keep in mind:
Lower EMI and Interest Rates
The primary reason to switch borrowers is to reduce the burden of huge EMIs. That is only possible if the rate of interest is low. So, the main reason is always to get a better interest rate that reduces the EMI debt significantly.
Better Terms of Repayment
Every lender has their own set of rules and regulations and loan pre-payment facilities that could offer a better deal than the current lender. Going carefully through all the terms and conditions, and understanding the provisions could get you a better deal.
The other is a top-up loan which the new lender normally offers. This top-up loan can be used for clearing any existing debt, it can also be used for renovation or doing any extension work at your home. The top-up loan is always offered at a competitive rate and is not a burden on the pocket. Your old lender may not give you a top-up loan but the new lender will almost definitely will. So, avail the top-up loan and use it for your own benefit.
Most lenders offer you the balance transfer in the initial days of your home loan as it is more practical. Opting for a switch earlier into the loan gives you more chance to save more money and benefit from it in the longer duration. Apart from the EMI rate, look for an agreement that permits prepayment, foreclosure and switching to another lender with no penalties. And finally, after you have considered all factors then only, switch your home loan. Also check whether you are eligible for pmay subsidy in balance transfer.
With Finserv MARKETS, applying for a home loan balance transfer facility is easy, quick and completely hassle-free. What’s more? You get a plethora of other benefits like customized offers, top-up options and many more. So why wait? Head over to our website and apply for a Bajaj Finserv home loan balance transfer facility with us, today!
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