Most individuals buying houses in today’s times cannot do so without the help of a home loan. The good thing is that there are many lenders out there offering various home loan plans to find suitable solutions for borrowers of all social statuses. Now, a loan plan that was offered 5 years ago can differ from one that is being offered today. Does that mean borrowers who have taken home loans cannot enjoy the benefits that new loan plans are offering? Of course not! If you have taken a home loan and find a new loan plan offering better terms and conditions, there is always an option of going for a home loan balance transfer.
A home loan balance transfer refers to the current outstanding loan amount being transferred to a new lender with the revised terms. However, it is often advised to those opting for home loan transfers that they should do so in advance and not towards the end of their existing loan tenure. To find out why, take a look at the following points:
- You can save more money on the revised interest rate
One of the most common reasons why people choose to transfer their loans is because the new lender is offering them a lower home loan balance transfer interest rate. While a slight change in the interest rate might not seem like much, it can actually make a significant difference to the overall cost of the loan in the long term. However, if this transfer is opted for towards the very end of the existing loan tenure, it might not be possible to save much on the revised housing loan interest rate as the loan is almost repaid, which means there fewer EMIs are left.
- It is possible to get a better repayment tenure
A home loan interest rate is not the only reason for which borrowers opt for home loan balance transfers. There are many cases where borrowers are not that satisfied with their current repayment tenure. It is also possible to opt for a home loan transfer if the new lender is offering a more favourable tenure to repay the loan in. You can make use of a home loan balance transfer calculator to figure out whether the new tenure is suitable.
- The new lender can offer a top-up loan
A lot of borrowers do not know this, but a home loan transfer can also get them a top-up loan. Plus, the tenure for this loan is the same as the existing home loans’, which is more than the tenure of an unsecured loan such as a personal loan. However, if you are opting for a home loan balance transfer towards the end of the current loan’s tenure, the top-up loan will not have a long tenure either, thereby increasing your EMI payments. So, it is better to opt for a home loan transfer in the initial stages.
Now that you know why opting for this transfer is better in the initial stages of the loan, make sure to play it smart in order to enjoy the full benefits of this move. In addition, it is better to check with the lender regarding the documents required for home loan balance transfer, as this will help fast track the entire process without any unnecessary delays.