A home loan balance transfer involves shifting the outstanding loan amount to another lender where lower EMIs have to be paid. Existing borrowers usually seek balance transfer facilities after comparing the interest rate, repayment period, etc., and subsequently finding that another lender offers more lucrative terms.
To determine whether you should opt for a home loan balance transfer, here are some major advantages for you to consider -
Favourable repayment terms
Every financial institution has different terms and conditions for repayment of a home loan. A balance transfer would help you to avail a better deal in terms of repayment.
Low rate of interest
One of the primary reasons to opt for a balance transfer is to avail a lower rate of interest. Such a rate offered by the new lender would lead to lower EMIs, which helps to ease your financial burden. You can use a home loan balance transfer calculator to find out what will be your monthly outgo after opting for this facility.
Top-up loans
Home loan balance transfer also extends certain indirect advantages. Apart from lower interest rates and monthly instalments, financial institutions may also offer a top up loan to provide borrowers with an additional credit line. Such a fund is offered over and above the existing loan amount.
Other benefits
A borrower stands to gain more from home loan refinance if the same is initiated at a time when lenders offer schemes, discounts or pre-approved offers. However, these benefits must not be the only reason one opts for a balance transfer of a home loan.
It must be noted that home loan balance transfer should be undertaken in the initial years of the loan tenor. It will ensure that you manage to derive the optimum benefits for a longer time.
Must Read: Things that you have to keep in mind while transfering housing loan to another Lender
