A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • How will a Home Loan Balance Transfer help you?

    A home loan balance transfer is the method of transferring any unpaid home loan amount to a different lender. This usually helps when the other lender is offering a lower rate of interest than your existing lender. Transferring your home loan balance to or different bank or housing finance company is helpful only when the other lender is offering a lower rate of interest. that way, you will not only save on interest but also pay lower EMI amounts.

    Discussed below are some of the most important benefits that you can enjoy by availing a home loan balance transfer facility.

    1. Pre-approved offers: Remember to keep an eye on the different pre-approved offers which lenders come up with. To attract customers, lenders often come up with discounts and schemes. If you avail one of these at the right time, the chances of you making a lower payment towards your home loan become better.
    2. Reduction in overall payment: As mentioned earlier, one of the most important reasons to opt for a home loan balance transfer would be to enjoy lower rates of interest. If the new lender is offering a lower rate of interest on your home loan balance transfer, it would essentially mean that you will be saving on the overall repayment of the loan and paying lower interests on your EMIs. This will save you a lot of money as home loans are usually big amounts with longer loan repayment tenures.
    3. Better terms for repayment of the loan: The terms and conditions for the repayment of loans differ from lender to lender. Along with a lower rate of interest, if you can also avail better terms for the repayment of the loan, it might prove to be very beneficial for you.
    4. Balance transfer over top-up loans: A top-up loan helps you borrow some extra money from your lender in relation to your existing home loan. In case you fall short of cash, you can avail a top-up loan which will help you fulfil the requirement for your housing unit. Home loan balance transfer usually offers the benefit of availing top-up home loans as well.

    Although your lender might offer you a top-up loan for your existing home loan, once you transfer the balance to another lender, your new lender is highly likely to provide you with a top-up loan at a lower rate of interest.

    That said, do not opt for a home loan balance transfer without checking all other relevant details of the new lender. For example, check the eligibility criteria for loan approval of the new lender. In case you need a top-up loan, this might be one of the most significant things to look into. In addition to that, do not forget to check all other relevant fees and charges such as foreclosure charges and pre-closure charges. More often than not, you might want to avail one of these features in case of a home loan and if the charges are too high, you might have to end up paying a lot.

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