When Is It a Good Idea to Opt for a Home Loan Balance Transfer?
A balance transfer is moving your high-interest outstanding debt to a low-interest one. It can ensure a better banking experience with reduced overall loan costs, more favourable terms and conditions and added benefits. Work with the top Indian bank that offers Fastrack home loan balance transfer facility in just a few steps. Users can enjoy excellent perks like:
- additional top-up facility based on repayment track record
- legal report waiver in case of balance transfer from leading banks and NBFCs
- loan tenure of up to 30 years
- top-up at the same rate as balance transfer
Here’s a guide on when would be a good idea to opt for a home loan balance transfer. Knowing this beforehand can help you make a sound choice.
Interest Rate
A reduction in CRR and bank rate due to RBI regulations lower the interest rate. So, if a well-established bank is offering the same, you can consider shifting the loan. It will lower the overall EMI burden and ensure maximum savings in the long run. But make sure to consider a shift in the first half and not during the residual tenure. Else, there would be little scope for making the interest savings through the home loan transfer.
Fees and Charges
A rate cut should not be the only reason to consider a transfer. If your existing lender is charging humongous processing and other fees, you can shift the loan to another bank with affordable rates. Take a look at the debit and ATM charges, home loan payment services, cash and DD charges and charges on account of delayed payments or defaults. Transparent and low rates can make the process of buying a home quite cost-effective.
Top-Up Facility
It is the flexibility to borrow additional money from the bank at the existing rates. This saves you from applying for the loan once again. It is a speedy solution when you require money immediately amid urgent situations. So, if your current lender does not offer this facility, you may think of shifting your outstanding balance to a better one. Consider a bank that allows top-ups up to 100% at the same rate as a home loan transfer. The eligibility is usually based on your repayment track record of your existing house loan.
Higher Outstanding Balance
A home loan consists of interest and principal amount. As and when the loan matures, the amount gets paid thus lowering the overall balance. If you have a big chunk of loan to be paid off, consider shifting the balance to a bank with better terms. It will lower the financial burden of paying higher interest for a longer duration. You are able to manage your other financial liabilities better.
Use a home loan transfer calculator to figure out the monthly EMIs to be paid. It would be a good idea to shift the debt in case the amount is lower than your present payment. You can talk to the new bank and know the terms and conditions involved before transfer.