If you are a homeowner in India and purchased your property on loan, then you might be well aware of the fact of how a home loan is and home loan transfer. In India, the rates of residential properties have touched the sky, especially after Covid-19, pushing more and more people toward home loans.
Around two years back, I got a loan and was recently unhappy with their customer service. Late reverts and delayed solutions motivated me to seek a loan transfer.
What is a home loan?
It is a loan type used to purchase or construct a residence in India. This long-term financial loan is offered by banks, financial institutions, etc,. In the current era of digitalization, availing this type of loan is super easy with just a simple download of a home credit instant loan app.
Furthermore, these loan types are secure, which means that the borrower has to offer some sort of collateral in the form of the purchased property. The loan amount here depends totally on the borrower’s income, creditworthiness as well as the value of the property that is being purchased.
What is home loan balance transfer?
As the term implies, it is a simple process where a borrower transfers their existing home loan from one lender to another. This is done when the borrower seeks a lower interest rate or suitable repayment terms.
In our country, this scheme has become quite popular in recent years due to the increasing competition among institutions to offer attractive interest rates and terms. By transferring their loan to another lender, the borrowers reduce their EMIs (Equated Monthly Instalments), save on interest rates, and pay off the loan much more quickly.
When and Why Should You Consider a transfer of Home Loan?
If you are planning to do so, consider it only when you are getting better terms, rates of interest, or additional benefits compared to your existing home loan.
I transferred my ongoing home loan to Bajaj Finserv, one of the best home credit instant loan app, I would say. The services and benefits offered by them are just unmatchable.Here are some of the common scenarios where you might consider the same:
● Lower Rate of Interest
If these rates have come down since you obtained your current home loan, transferring to a new loan with a lower rate can totally help you save bucks over the long term. It’s essential to first evaluate the potential savings and compare it against any costs associated with the transfer.
● Improved loan terms
Transferring your home loan can also be beneficial if it provides you with improved loan terms. So, for instance, you might be able to switch from a variable interest rate to a fixed interest rate, which can ultimately offer stability against rate hikes in the future.
● Additional pros
Another reason to consider the same is if the new lender offers additional features or benefits that align better with your needs. These might include a redraw facility, offset accounts, or even the ability to make extra repayments without penalties. Therefore, take into consideration whether these features are worth the transfer or not.
● Better service
If you are not satisfied with the customer service provided by your current lender, a home loan transfer to a different institution with a better reputation for customer care might be worth it.
● Debt Consolidation
If you have multiple loans, including personal loans or credit card debts, transferring your home loan can be a better option as it’ll provide an opportunity to consolidate your debts into a single loan. This helps in simplifying your finances and potentially lower the overall rate of interest.
