Home Loan Balance Transfer Benefits You Can Benefit From
Your home loan, which was once a lifeline, can become an unmanageable burden over time. It is, after all, a long-term commitment that can span almost three decades, which is a significant portion of the life and work span of an average working Indian. With rising interest rates, inflation, changing banking conditions, and other micro and macro factors, the initial borrowing terms of your current home loan can be daunting.
However, such a scenario is not an ultimate solution for home loan borrowers, and it is always possible to improve the current terms of your home loan with a home loan balance transfer. This procedure allows home loan borrowers to attempt to renegotiate the terms of the remaining balance of their home loan, such as home loan interest rate, repayment term and others, by transferring the remaining loan amount to a new mortgage lender.
The new lender, in turn, pays off your home loan balance to your previous lender, taking over the mortgage on itself, where you repay the outstanding amount to them based on a new repayment schedule. Often, eligible applicants are also offered the option of refinancing their current home loan with a top-up loan of up to Rs. 1 Cr* and sometimes more. This can be especially beneficial for new buyers who are looking for additional financing to furnish their new home or renovate their old home.
Many are unaware of this facility or are discouraged by the lack of information. However, home loan balance transfers are one of the most convenient features available to home loan borrowers, and they will benefit immensely by using it. This article highlights the most important benefits home loan borrowers can get.
Features and Benefits of a Home Loan Balance Transfer
Here are some of the most promising benefits a home loan balance transfer holds for those considering it. Looked:
- Competitive interest rates on home loans
One of the fundamental reasons for changing lenders is often an unsatisfactory interest rate that borrowers are currently forced to pay. When transferring your home loan balance to the new lender, you may request an interest rate review if your home loan eligibility permits. This can help you pay off your home loan balance with manageable EMIs.
- Attractive refinancing options
Moreover, home loan borrowers who meet the lender’s eligibility criteria can even avail additional funding in the form of a top-up loan, which can be up to Rs. 1 crore or more. The interest rate on an add-on loan is also reasonable and helps you get financing within your budget.
- Flexible repayment term
When enjoying your home loan, you may have agreed on a certain term, but you may find that it no longer fits your financial situation. With a home loan balance transfer, you can also expect to get a new repayment term – more suited to your needs, if you meet the lender’s eligibility criteria.
Availing of a home loan balance transfer is quite easy as home loan borrowers can opt for it as long as they have paid off their home loan for at least 6 months. This can be a great relief if you are struggling to meet your EMI commitments and can help you avoid late repayments or defaults, which can threaten your propensity for further loans and your financial stability.
Make sure you have considered all aspects of your home loan before choosing to transfer your home loan balance. Moving only makes sense if you have a large sum pending repayment. However, if you’re nearing the end of your refund term, consider the transfer costs and make sure they don’t exceed your refund balance. Once you’ve done your due diligence, request a home loan balance transfer at the earliest.