Most homebuyers apply for home loans to arrange for the finances required. Now, there are many lenders that offer different home loan plans to suit borrowers of various financial backgrounds. To keep attracting more customers, lenders keep revising the terms of their home loan plans. So, it is quite possible for a home loan borrower to find current home loan plans offering better terms as compared to their current plan.
In such cases, a borrower can choose to opt for a home loan balance transfer. This transfer involves shifting the current home loan from one lender to another lender. A lot of borrowers opt for this transfer in search of a lower home loan balance transfer interest rate, convenient repayment tenure, better customer service, top-up loan, and so on.
Now, before opting for a home loan balance transfer, there are a few things that one needs to think about. Take a look at the following factors that a borrower needs to keep in mind before transferring their home loan to a new lender:
- Keep the remaining repayment tenure of the existing loan in mind
It is very important to keep the loan’s remaining repayment tenure in mind before opting for a home loan balance transfer. This is because if the tenure is almost over, a borrower might not be able to make any significant savings. To take advantage of the new lender’s revised interest rate, it is advisable to transfer the home loan only if much of the repayment tenure is remaining.
- Calculate the overall savings of transferring the loan beforehand
When it comes to a home loan balance transfer, a borrower needs to be sure of the amount that they end up saving. Now, a lot of borrowers make the mistake of only considering the lower interest rate while calculating the amount they would save. However, it is also essential to consider the additional charges involved in the transfer, such as the processing fees, stamp paper expenses, and so on.
- Focus on the revised interest rate
One of the most important aspects to focus on is the home loan balance transfer interest rate. While a slight change in the interest rate might not seem like much, it can have quite the impact on EMI payments of the home loan.
- Always use a home loan balance transfer EMI calculator
A borrower needs to know what the revised EMI payments would be after they transfer their home loan to the new lender. This is exactly what a home loan balance transfer EMI calculator can help with. This home loan EMI calculator will require details of the outstanding loan amount, revised interest rate, and repayment tenure, based on which it will provide the revised EMI payments of the home loan.
A home loan transfer can make a home loan’s repayment much more convenient and also save a significant amount of money. Make sure to keep the above-mentioned points in mind before transferring the home loan, as this will help in ensuring that you are making the right decision.
