When it comes to availing reduced interest rates on your home loan, a home loan balance transfer facility comes off as one of the best options to undertake. This facility allows an existing housing loan borrower to refinance his/her outstanding loan value with a new lending institution to avail a better interest rate.
This home loan balance transfer facility brings in effect an altogether new loan agreement with terms of the loan as per the new lending institution. It thus requires a borrower to foreclose his/her home loan account with the existing lender. This process requires minimal documentation, and one needs to maintain a steady repayment track record to avail of its benefits.
Moving ahead, some notable advantages of this balance transfer facility are –
- Savings on interest payment
- Availability of additional home loan amount above the existing outstanding value based on your eligibility, i.e. ‘top-up loan’
- Flexibility in repayment terms
The home loan balance transfer process is simple and straightforward as well. You only need to make a simple application to initiate it. You must, however, avail the facility only after having paid a stipulated number of EMIs.
Choosing the right time to go for your home loan balance transfer can be crucial as it defines the overall savings that you would make in effect. It is ideal to go for it towards the beginning of the tenor, against the end, as you might have already paid a huge portion of your interest liability. Therefore, evaluate every facet of this facility and make a decision as per your benefits.
Read Also: Things To Know About A Housing Loan Balance Transfer
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