Buying a home through a Home Loan is a major financial commitment which can be quite taxing if not planned well; on one hand, it fulfils the financial gap in the purchase of a home and on the other, it can end up being a burden. When repayment of a Home Loan becomes challenging, a lot of applicants contemplate pre-payment. However, this solution is not everyone’s cup of tea as it involves paying multiple EMIs together.
A Home Loan balance transfer is a more feasible and economic option to make a Home Loan more affordable. This transfer can be from a floating interest rate scheme to a fixed interest rate one with the same lender or it can be transferring the loan account to a different lender altogether, which is similar to a fresh Home Loan.
The primary motive behind a Home Loan balance transfer is to save on the interest rate. For a balance transfer to be effective, timing is the most important factor. Where you are in the repayment tenure of your Home Loan with your existing lender decides whether switching to a different lender offering a lower rate of interest will be profitable or not.
In addition to the timing, you should also check the lending terms and conditions of the new lender.
Why Should You Transfer Your Home Loan?
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.