If you are experiencing a financial crunch due to high EMIs or simply want to avail a better home loan interest rate, transferring your housing loan is a viable option. Transferring your home loan need not be a complex procedure provided you are aware of the transfer charges, get additional benefits on the balance transfer, and avail a nominal interest rate.
You can decide to opt for a Home Loan Balance Transfer with lenders to receive a competitive interest rate on your home loan refinance as well as other benefits like a top-up loan, a long repayment tenor, and customized insurance options. However, you need to observe an array of steps in order to undergo a financially viable balance transfer. Here is what you should consider while applying for a home loan balance transfer.
Compare on-going Interest Rates
If you are contemplating a home loan balance transfer, study the interest rates offered by various lenders in the market. Choose between a fixed or floating rate of interest and understand the lender’s system. Even a marginal change in the interest rate can save you lakhs of rupees as home loans are lengthy commitments and a longer tenor results in a greater amount of interest paid. You can use the home loan EMI calculator or the home loan balance transfer calculator to compare lender offerings and know the exact amount payable in an instant.
Run a Background Check on the Lender
When you are looking for lenders to refinance your existing home loan, you must carefully study their background and reputation. Read reviews, search for testimonials, and talk to existing customers to gain insight on customer service. You can make use of online portals and forums to understand the additional features and services offered by the lender.
Have Proper Documentation
When you narrow down on a new lender for a home loan balance transfer, get an approval from your existing lender for the same. This will involve getting a NOC or letter to formalize the process. You must then submit the letter to your new lender and wait for their approval. In the meantime, ensure your property-related documents are ready as this could become extremely time-consuming if you aren’t well prepared.
Check all the Costs Involved
There are a number of charges and hidden costs involved in a balance transfer. This includes but is not limited to processing fees, application fees, legal fees, and pre-payment charges. However, you can negotiate for lower fees and reduce your penalty charges if your credit score is high.
Switch Early on in your Loan Tenor
If you want to apply for a home loan balance transfer, it is wise to shift within the first half of your existing tenor in order to save more. Otherwise, the cost of transferring the loan can exceed the amount you save. Also, in order to keep repayment within your budget, you can opt for a Flexi Hybrid Home Loan upon refinancing. A unique Bajaj Finserv offering, this facility allows you to pay interest-only EMIs for up to the first 4 years of your loan tenor that gives you more time to plan your finances before you start paying the full EMI amount.
Keeping these factors in mind, apply for a home loan balance transfer with a lender of your choice.
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