Due to increasing interest rates and extended tenure of home loans, most borrowers are unable to repay their loan on time which results in increasing debt burden. Therefore, to avoid such a situation, borrowers can opt for measures such as home loan balance transfer.
In case of a home loan balance transfer, borrowers transfer their unpaid principal amount from their current financial institution to another lender who is offering more favourable interest rates and terms on home loans. This facility enables a borrower to avoid falling into a debt trap and pay off the whole amount on time.
However, one should know the ideal time to refinance their home loan to avail its full benefits. Consequently, they need to keep in mind that during the initial years, the principal component is less than the interest portion in their EMIs. Whereas in the later period of loan tenure, the interest amount is lower than the principal. Hence, one should opt for home loan transfer during the initial period to avail the maximum benefits of the reduced interest rates.
Borrowers can opt for online tools such as home loan balance transfer calculator to compute the difference in interest outgo between their current and new lender. It will enable them to make an informed decision while initiating home loan refinancing.
Additionally, one can also calculate the top-up loan amount that they are eligible for with the help of a top-up loan calculator.
Such a calculator will enable borrowers to check the EMI that they will be paying towards servicing the top-up loan by entering the top-up loan interest rate and tenure.
In case of a home loan balance transfer, borrowers transfer their unpaid principal amount from their current financial institution to another lender who is offering more favourable interest rates and terms on home loans. This facility enables a borrower to avoid falling into a debt trap and pay off the whole amount on time.
However, one should know the ideal time to refinance their home loan to avail its full benefits. Consequently, they need to keep in mind that during the initial years, the principal component is less than the interest portion in their EMIs. Whereas in the later period of loan tenure, the interest amount is lower than the principal. Hence, one should opt for home loan transfer during the initial period to avail the maximum benefits of the reduced interest rates.
Borrowers can opt for online tools such as home loan balance transfer calculator to compute the difference in interest outgo between their current and new lender. It will enable them to make an informed decision while initiating home loan refinancing.
Additionally, one can also calculate the top-up loan amount that they are eligible for with the help of a top-up loan calculator.
Such a calculator will enable borrowers to check the EMI that they will be paying towards servicing the top-up loan by entering the top-up loan interest rate and tenure.
Read Also: Loan Balance Transfer: Things you Must Consider Before Opting for Balance Transfer
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