Purchasing a home is most often possible only with the help of a home loan. Borrowers apply for home loans and get the financial assistance required for property purchases. Now, while applying for a home loan, one would look for a lender that provides a sufficient loan amount, convenient repayment tenure, and an affordable interest rate. However, lenders keep coming up with new loan plans. Therefore, it is quite possible to find a new loan plan being offered today that provides better benefits as compared to your existing one.
Does this mean that you have lost out on a better deal? Of course not! If you are looking forward to taking advantage of the new loan plan’s benefits, there is always an option of going for a home loan balance transfer. This transfer involves shifting the current loan from one lender to another for better benefits.
Now, before opting for this transfer, do keep the following pointers in mind:
- Check your credit score
Every financial institution considers an applicant’s credit score before giving them a loan. Since lenders prefer borrowers with good credit scores, they offer better deals to those who have a good credit record, such as a bigger loan amount at a lower interest rate. This is why you should clear all due payments on time and avoid any inconsistencies in paying bills to maintain a good CIBIL score.
- Be aware of the charges involved
The interest rate of the home loan is not the only expense you have to incur. Lenders can also charge additional fees for a home loan balance transfer such as application fees, processing fees, administrative charges, and so on. Being aware of these charges will help in calculating the amount you actually save after going through with the home loan transfer.
- Focus on the revised interest rate
One of the main reasons that borrowers opt to transfer their home loans is for a lower interest rate. This is because even a slight reduction in the interest rate of the loan can make a significant difference in the monthly instalments of the loan. So, make sure to get a good deal on the home loan balance transfer interest rate while transferring your loan.
- Make use of a home loan balance transfer EMI calculator
The most important thing while taking a loan is being sure that you have the finances to pay off the loan without any difficulties. To help you with this, a home loan balance transfer calculator can help provide the EMI results of the home loan. Therefore, it is advisable to make use of a home loan balance transfer calculator to learn about the monthly instalments of the home loan after transferring it to the new lender. This will give you an idea of whether the new EMIs are making the repayment easier or not.
In addition, it is advisable to speak with the lender regarding the documents required for home loan balance transfer. This way, the documentation process can get completed without any hassles.
