Top 3 Reasons Why You Should Switch Your Home Loan Today!
With housing credit markets expanding annually, lenders compete among themselves to provide the best home loan facilities for maximum convenience of beneficiaries.
The most prominent and innovative facilities include home loan balance transfer and top-up loan opportunities. The former helps an individual refinance an existing home loan, while the latter allows the customer to avail higher loan amounts on an existing loan. These facilities help an individual continue financing their residential property purchase while reducing the overall loan burden with favourable terms provided.
An increasing number of applicants are seeking home loan balance transfer to make home loans affordable while also developing the savings funds.
What is the home loan balance transfer facility?
Balance transfer facilities on home loans are offered by several housing finance companies (HFCs) in the competitive housing credit market. With this facility, individuals can transfer the outstanding balance on an existing home loan from one lender to a new loan from another lender.
Individuals avail the balance transfer option to shift the total unpaid principal loan amount from one lender to another.
This home loan refinances strategy reduces the burden of interest payment and hefty EMIs on individuals.
Individuals can use a balance transfer calculator to check the details of a balance transfer such as the amount of repayment, tenor, rate of interest, and the EMI of the refinanced loan.
3 reasons to switch your home loan
Customers often seek home loan balance transfer facilities to get exclusive advantages from the new lenders. Individuals also need to have the documents required for a home loan balance transfer for easy processing.
The 3 reasons to switch home loan by using this refinance strategy are –
– Lower interest payment
Individuals avail balance transfer facilities from lenders which offer affordable interest rates on the outstanding home loan amount.
With reduced interest payment, the individual’s EMI to repay the loan substantially decreases, also leading to higher savings.
Balance transfer option can also be used to shift from a fixed interest rate home loan to a floating interest rate home loan or vice versa. Fixed interest rates on home loans are rigid whereas floating interest rates are influenced by market conditions.
Individuals can switch their outstanding home loan balance to a new lender offering a lower rate of interest in case the existing lender offers a fixed interest rate that exceeds the prevailing market rates for home loans. Contrarily, individuals can opt for lenders which offer lower fixed interest rates when the prevailing floating interest rates are higher due to market fluctuations.
Either way, customers avail this facility to save money by way of paying a lower interest amount on the unpaid home loan balance to the new lender.
– The longer tenor of loan repayment
Customer can refinance home loans by selecting new lenders who offer longer tenors of repayment on the same outstanding balance of the home loan.
Balance transfer facility is beneficial in the event that the existing lender offers a short tenor which increases the interest and EMI burden on the customer. The individual can then compare and choose new leaders who are willing to offer longer tenors to ease EMI repayment.
This feature leaves the customer with a higher disposable income to meet any required financial requirements. This also lowers the debt-to-income ratio of an individual, thus making him eligible for new loans simultaneously.
– Loan top-up facility
To attract customers, lenders offer top-up loan facilities on balance transfer. Individuals can request for a higher loan amount from another lender by negotiating the interest rates and tenor facilities.
Home loan balance transfer enables an individual to save a higher amount by paying lesser on existing home loans. Individuals can thus avail balance transfer facilities to ease the repayment burden on home loans.
