A house is the biggest investment in an individual’s life as it provides emotional and financial security. But the soaring property costs make it challenging to fund. Hence, Indian banks offer financial assistance through Home Loans. It is a long-term association that comes with an interest you repay in equated monthly instalments.
The interest rate plays a massive role in deciding your repayment experience. Higher the interest, the bigger the loan burden. Hence, it is best to get a lower interest. But if you already are struggling with higher interest, there is still hope. Look for better offers and switch when you find one with a Home Loan balance transfer. It is a beneficial option to reduce the loan burden. But before opting for it, make some considerations:
Timing: This often gets neglected. The focus is on getting affordable deals. However, it plays a significant role in benefitting from such offers. They are ideal for refinancing when you have a long outstanding tenure. This way, the lower interest rate gets applied to the entire amount. On the contrary, switching towards the end only leads to incurring unnecessary costs with no major impact.
Charges: It is not advisable to refinance each time you see a lucrative offer. This is because the process involves costs. These include the transfer charges, processing fees, administrative expenses, application fees, etc. Besides, some lenders also have hidden charges. It is best to do a cost-benefit analysis for the same. You must do a Home Loan transfer only when benefits outweigh the costs.
Offer: Although getting lower interest is the aim, it should make a significant difference. Many deals look tempting, but only a few provide substantial benefits. Hence, assess the feasibility of each offer. Use the Home Loan EMI Calculator for getting an accurate estimate of the deal. Also, check if the discounted interest rates are for the long-term or a short-term perk.
Requirements: Hold a good credit score, financial standing, employment, etc., to qualify for refinancing. The new lenders verify your details for the same. They also examine your EMI records, which should be default-free. Also, you can switch when you have cleared instalments of at least six to 12 months. Make sure to consider this and check other parameters to get approval.
Service and terms: A Housing loan is a long-term commitment. You ensure to choose the right lender for it. Hence, consider the service quality for informed selecting. Assess the approachability, reputation, and record of the lender. Also, as you agree to a Home Loan balance transfer, follow the new terms. Thus, read the fine print carefully before opting in.
Keywords used: Home Loan balance transfer, Home Loan transfer