Home loan balance transfer, ever since it first came into picture, has helped many existing subscribers get their house refinanced and save a lot of money. This feature/ facility is a blessing for those who took a home loan at base rate on or after 27th June, 2017. They can check out the current market, explore the different credit schemes available, compare them based on personal requirements and apply for home loan transfer. Once approved, your home loan will be refinanced by the new lender and you’ll EMI obligations will come down by a considerable margin.
Talking about the same, you can apply for balance transfer if your current lender offers you the facility. However, before you do that, there are a few things you must check i.e. a couple of things you must ensure.
Lower EMI: The whole point of switching your lender is to lower down the overall obligation (reduce the payable interest) so as to reduce the burden. Given that, if your new lender is not offering the loan at a significantly lower interest rate, there’s no point switching your lender. Thus, always make sure the interest rate difference is sufficient to make a difference to your loan.
Top-up loan must be there: Top-up loan is an additional feature offered by multiple housing finance companies. Though it’s not mandatory but it’s always better to have this facility as an option.
Bottom line: Calculate the overall cost of transfer before applying for home loan balance transfer and make sure the profits you’re making are considerable.
Reference Read: Try Home Loan Balance Transfer to Avoid Spiral of Interest Rate Hikes
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.