The home loan interest rate is subject to market changes and if you find that the current interest rate is lower than what you are paying, you can opt for a home loan balance transfer.
Generally, a home loan transfer benefits borrowers in the following ways -
- Reduces total interest payable
- Lowers EMI amount
- Offers better terms of service
- Allows availing a top-up loan
Nonetheless, following are some of the factors that one needs to keep in mind while opting for a home loan balance transfer.
1. Negotiate for lower interest rates
One of the reasons individuals choose to transfer their outstanding home loan balance to another lender is to avail competitive interest rates and other favourable terms of service. Here, if the borrower has high credit scores, he/she can negotiate for lower interest rates.
2. Inquire about the top-up loan
Another advantage of a loan transfer is that a new lender offers a top-up amount over and above the outstanding home loan amount, during the transfer. Moreover, top-up loan interest rate is usually lower that other financial products with “no end-use restriction” feature. In this regard, one can use a top up loan calculator to estimate the interest payable.
Borrowers should also consider the adjoining charges, if any, before opting for the loan balance transfer facility.
Thus, while a home loan proves to be an excellent way to finance a property purchase, one can maximise the benefits by opting for a home loan balance transfer as well as a top up loan.
Read Also: Things to Consider Before Opting for a Home Loan Balance Transfer
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