Have you heard of the term home loan transfer? If you are an existing home loan customer, then you may have heard about the home loan balance transfer.
The home loan transfer is the process of moving your existing home loan account from one lender to another offering better rate and other advantages.
If you are dealing with higher interest on your housing loan, then it may hurt your outlays, especially if you have other debts.
In the same context, the facility of the home loan refinance may help you pay lower EMIs, avail top-up loans, and much more. But before you go ahead with the home loan transfer, you need to consider a few things. Read on and explore more!
What is the home loan balance transfer?
As the name suggests, the transferring of the housing loan account from one lender to another is what is known as the home loan refinance.
If another lender is offering a lower rate of interest, then you can switch your loan account to it. This way, you can pay reduced EMIs and also enjoy the facility of the top up loan to get funds to meet needs. If you are facing a higher rate on the home loan, then the home loan transfer is the best option.
What things to consider before the home loan refinance?
Ensure to negotiate on a lower rate of interest
Why are you opting for the home loan transfer? It is sure to enjoy the benefit of lower interest rates. And if that purpose does not get served, then there is no need to do that. Hence, before you apply for the home loan transfer, negotiate for a lower rate. You should do that with your existing lender. Seeing you moving away from it, the current lender may offer a lower home loan balance transfer interest rate to retain you. If you have maintained a robust repayment history, then it may consider your request. You can use the home loan balance transfer calculator to be sure of what you will get.
Check your cibil score
The credit score of yours is an indication to know if you are eligible for the home loan transfer or not. If you have defaulted on your ongoing loan, then your credit rating may take a hit. And you may have a poor cibil score. Having a lower credit score means that you may not be qualified for the home loan balance transfer with a new lender.
Charges associated while making the switch
The next thing that is worth considering is the charges associated with the home loan transfer. It will include charges such as processing fees, administration, inspection and other costs. There will be charges that the existing and prospective lender will ask you for. You should use the home loan balance transfer calculator to determine the overall cost of the ensuing home loan transfer. This way, you will be able to the exact cost of the balance transfer and whether if it is less than the interest amount.
Ensure reading the fine prints of the loan before applying
Once you have decided on a lender for the home loan transfer, you should ensure that you go through the entire terms and conditions beforehand. This way, you will be able to avoid all hidden charges. You should also know the facilities that your new lender has to offer.
Check if there is a provision for the top up loan
Once you switch your home loan account to another lender, you should also check if the lender is offering you the facility of the top up loan. A top up loan is a higher amount of value that your lender may offer you at a rate similar to that of the home loan. The tenure of the loan could also be similar. It may help you cover your any other needs without restrictions.
You are now aware of the aspects to consider before applying for the home loan transfer. Once done, you will be able to approach and manage the home loan transfer confidently.
