Home loans have been companions of many people in building/buying their dream house. Many banks can offer home loans to help you out. However, some people are not satisfied with their bank and wish that they would have taken home loans from another provider. Well, as a responsible bank customer, you should know that home loan balance transfer facilities are also available. Continue reading to know when is the right time to apply for a home loan balance transfer.
Understanding home loan balance transfer
Transferring the home loan balance to another bank is also known as refinancing. In balance transfer, the remaining principal amount of a home loan is transferred to some other bank. Consider an example where you have taken a home loan and have been paying interest for two years. After two years, you come across a bank offering home loans at lower interest rates. In such a scenario, you can apply for a home loan transfer to another bank that offers lower interest rates. There is no compulsion that you can only transfer a home loan to another bank for lower interest rates. Be it any reason, you can opt for refinancing your home loan.
Besides higher interest rates, a longer repayment duration also motivates a customer to opt for loan refinancing. Interest rates on home loans are a serious concern. The interest rates for a home loan can range from 6% to 12% depending on the loan provider. If you are not happy with interest rates, opt for refinancing in the early stages. If you delay loan refinancing, you may have already paid a significant amount of interest to the bank. Consider you have taken a home loan of INR 20 lakh for 15 years with an interest rate of 12%. At the end of 15 years, you will pay a total amount that is much more than your principal amount. Let’s say you have transferred the same loan to a provider with an interest rate of 10%. For the same loan, you will now save INR 6 lakh which, would have been counted as interest.
As you can see home loan balance transfer can save you a lot in the long run. Some people that aren’t satisfied with the customer service of their bank also apply for loan balance transfers. Before applying for loan refinancing, talk to your bank for once. In some cases, banks lower the interest amount on home loans to retain their customers. It is done to make sure customers do not go to other banks for loan refinancing. If your bank isn’t interested in lowering the interest rates, you can choose loan refinancing. There is no compulsion to search for a well-settled bank for loan refinancing. A reliable NBFC like Clix Capital can also help you with loan refinancing.
When’s the best time to transfer a home loan?
You can apply for a home loan transfer based on scenarios and time. Irrespective of the time, you can apply for a home loan transfer in the following scenarios:
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- If you feel like the provider is charging more home loan interest rates, you can apply for a loan transfer. If you aren’t happy with the interest rates, transfer your home loan to another provider in the early stages. Usually, RBI controls the CRR in the country. However, banks might offer home loans at lower interest rates during any festival or launch of a marketing campaign.
- People also opt for loan refinancing when they aren’t happy with the terms and conditions of their provider. You must refer to the terms and conditions of a loan provider before transferring your loan. Loan transfer involves transfer costs and some documentation. It is not feasible to go for a loan transfer every month when there is a change in home loan interest rates. It is why you should consider all the factors before applying for a home loan transfer.
- For every instalment of a home loan, you have to pay some part of the principal amount and interest charge. If your overall loan amount after a specific duration is more than expected, you can apply for loan refinancing. Don’t choose banks and NBFCs that apply unnecessary charges for each instalment.
What is the best time to transfer a home loan? Well, there are several times when banks lower their interest rates to facilitate customers. You can keep an eye on the bank rates to decide the best time for a loan balance transfer. A little research on the internet can help you find a reliable provider for loan refinancing. You can visit the official website of Clix Capital to calculate EMIs for your home loan at affordable rates.
According to the experts, the recent COVID pandemic has bought a shift in home loan interest rates. To facilitate the customers, loan interest rates are lowered by many providers. There is a significant difference in the loan interest rates before the COVID pandemic and now. It will be beneficial to apply for loan refinancing at the start of 2022. Sometimes, interest rates are also lowered during the festive seasons. Many banks also lower their loan interest rates while launching a new marketing campaign.
What are the pros of home loan refinancing?
The pros of home loan refinancing are given below:
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- You can reduce your monthly loan EMIs by transferring them to some other provider.
- You can get lower loan interest rates as compared to your current loan provider.
- You can pay a lump sum amount during loan refinancing to reduce the number of EMIs.
- You can reduce the loan tenure by refinancing it to a better provider.
- Loan refinancing can help you look for a lender with better terms and conditions.
- Loan refinancing can help you look for a lender with better customer service.
If you are confused about home loans, you can visit the official website of Clix Capital for EMI calculation. You can get home loans at favourable terms and conditions with Clix Capital. Apply for loan refinancing right away!
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You can also reach out to us at hello@clix.capital or call us at 1800 200 9898
