With home loan interest rates expected to plummet as a result of the latest repo rate cut announced by the RBI, borrowers stand to benefit from the move. Further, they are also looking for ways to lower the interest rates applicable to their advances. Thankfully with home loan balance transfer made available by leading financial institutions in India, borrowers have an option to switch their outstanding loan amount from one lender to another.
This way, one can easily avail a lower rate of interest against their home loan and consequently reduce their EMI payments. Following is an elaboration on what a balance transfer option entails and the benefits available under it.
What does the balance transfer facility on home loans entail?
Like its name suggests, home loan balance transfer allows individuals to shift their repayment liability from their existing lender to a new one.
When a borrower opts for the balance transfer, the new lender assumes the lending responsibility of the outstanding amount. Consequently, the borrower’s liability shifts to the new lender, and he/she has to pay EMIs as per terms set by the new financial institution.
By opting for the home loan balance transfer facility, a borrower can not only reduce their EMIs through lower interest rates but also enjoy better and more favorable repayment terms.
What are the benefits offered through the loan transfer facility?
Opting for a loan transfer can impart a borrower with several benefits. Here’s everything you need to know about home loan balance transfer benefits before opting for it –
- Boosts loan affordability
By allowing individuals to opt for a home loan with lower interest rates, the loan transfer facility makes such advance more affordable. Borrowers can save quite an amount by virtue of lower EMI payments and maximise their profitability from the home loan.
Nonetheless, opting for the balance transfer facility may levy additional charges on the borrower, and they might end up paying more than they save. It is, thus, crucial for individuals to make a cost-profit analysis before opting for it.
- Avail a top-up on the existing loan amount
You can not only reduce your EMIs with a home loan balance transfer facility but also avail a top-up on your existing loan amount. The top- up advance available for up to an amount of Rs.50 lakh, has no end-use restrictions and allows one to meet every financial obligation without hassle.
- Avoid part-prepayment and foreclosure charges
Opting for a loan transfer facility can allow one to switch his/her outstanding loan amount to a lender who does not levy part-prepayment and foreclosure charges on home loans. For instance, individuals transferring their existing loan amount to a lender like BHFL will enjoy this benefit.
Furthermore, the housing finance company also extends pre-approved offers to customers, which can facilitate to make the process of availing loans faster and simpler. Individuals can avail these offers on several financial products like home loans, loans against property, etc. You can check your pre-approved offer by providing your name and phone number.
- Avail convenient repayment terms
Individuals unsatisfied with their existing repayment terms can shift their outstanding loan amount to a new lender offering more convenient terms. Thus, the home loan balance transfer facility can be used not just to reduce EMIs but also to enjoy more favourable financial services.
These are few of the many benefits that an individual can avail by opting for a loan transfer. Nonetheless, one also needs to satisfy a few criteria to enjoy this facility.
Eligibility to opt for a loan transfer facility –
To avail this facility, borrowers need to satisfy criteria like –
- The property purchased must be occupied or ready to be occupied by the borrower.
- One has to make a certain number of EMI payments already to shift his/her outstanding loan to a new lender.
These criteria are set as per the discretion of the new lender and might vary from one financial institution to another. Furthermore, there are several documents required for a home loan balance transfer.
It is, thus, crucial for individuals to check compliance with them before opting for this facility. Availing the balance transfer facility on home loans after considering all essential factors is sure to make financing affordable.
Also Read:- How to Reduce Home Loan EMI in India