Everybody dreams of having a house of their own, but the non-availability of required funds creates an obstacle. There comes a home loan to the rescue. After doing detailed research, one finally chooses the deal that matches their requirement the best. However, it might not remain so as things move forward. There can always emerge other lenders offering a better bargain. If so, one can transfer their home loan to a new lender to get better terms and lower interest rates. This shift is called a home loan balance transfer, in which you transfer home loan balance to another lender offering better terms and conditions. Let’s look at this option in detail.
What is a Home Loan Balance Transfer?
A home loan balance transfer is the facility where you can refinance your existing home loan balance to a new lender. Many banks, NBFCs, and other lending institutions existing home loan customers a balance transfer home loan facility. With this facility, you can transfer the balance amount of your existing home loan to a new lender who is offering a lower interest rate and better terms and conditions. When you avail this facility, you transfer your current home loan to a new lender. The loan is treated as a regular home loan only, but with a reduced home loan interest rate than your previous lender.
Reasons to Opt for a Home Loan Balance Transfer
There are a handful of reasons why you should consider a balance transfer home loan. One of the main reasons for choosing this facility is to get a lower home loan interest rate compared to your existing one. The revised interest rate, repayment tenure, any other offers, and incentives can be the reasons for opting for a home loan balance transfer.
Things to Consider When Choosing Home Loan Balance Transfer
You cannot keep changing your home loan lender with every better offer you come across. There are several things you must consider before making such a big decision. Some of them are:
-
- Loan’s Lifecycle
A balance transfer home loan will not fetch you much profit if you are already at the end of your home loan tenure. You have already paid a large sum, and only a negligible amount is left. In such a case, it is advisable to retain the old loan only and wait for it to get over.
-
- Cost-Benefit Analysis
Only a lower interest rate should not attract a loan transfer decision. There are various other costs, such as transfer charges, that can make the deal unprofitable. So, you should perform a thorough cost-benefit analysis before making your final move.
-
- Unpaid Balance
You must go for a home loan balance transfer only if a considerable amount from your existing home loan remains unpaid. In that case, the profits you reap through lower interest rates on a large sum can easily cancel out any transfer charges.
Benefits of Home Loan Balance Transfer
There are several benefits of opting for a balance transfer home loan. Let’s look at a few of them.
-
- A lower home loan interest rate reduces your EMI amount, due to which their repayment becomes easier, and the loan becomes more manageable.
- Since the EMI amount has been reduced, you may shorten your loan tenure. As a result, you may get rid of your loan sooner and save on the total interest outgo.
- You may also get a top-up loan along with the home loan balance transfer to cover more costs if needed.
The Detailed Process of Home Loan Balance Transfer
These are the steps involved in a home loan balance transfer:
-
- Compare lenders who are offering the facility of the home loan balance transfer.
- After finding a lender offering a lower home loan interest rate, talk to your existing lender and negotiate a better deal. The chances are that they may ease down your loan terms and conditions to retain you as their customer.
- If you decide to transfer home loan, get NOC from your existing lender stating your remaining loan amount.
- Collect all your property-related documents from the existing lender and submit them to the new lender.
- Complete all the legal formalities to transfer your loan.
- The new lender will pay off your unpaid loan amount to the previous lender.
- Once the process is complete, a new cycle of loan EMI repayments starts with the new lender. Stay consistent with your payments to get the most from your decision.
As a borrower, opting for a home loan balance transfer is a wise decision if done well. Clix Capital offers easy and customisable home loan repayment options to the customers who transfer their home loan balance to us. Get in touch to transfer home loan today at Clix Capital and benefit from lower interest rates and easier terms and conditions.
For any queries, find us on Facebook, Instagram, LinkedIn, Twitter, or WhatsApp
You can also reach out to us at hello@clix.capital or call us at 1800 200 9898
