What Should You Know About Home Loan Balance Transfer?

What Should You Know About Home Loan Balance Transfer?

Many people these days are seen to be keen about real estate investments. Although the property rates are increasing subsequently, the real estate market is seen to be open for new investors. Buying your own house is always a good idea rather than residing in a rental apartment. It is a well-known fact that the comfort that an owned house offers cannot be experienced in a rented apartment. In order to feel the same, one needs to purchase his own apartment. However, being this the situation, buying a house is not everyone’s cup of tea. For many, finance is the major obstacle, when it comes to buying a house.

During such a financial emergency, you can look upon financial institutions for help. Many lenders offer Home Loans to investors who are keen about investing in real estate. As mentioned above, real estate these days is experiencing a rapid growth of investors. A major reason for this can be the cut down of repo rates by the Reserve Bank of India (RBI). This means, after demonetization, all investors will be charged with a low rate of interest on new Home Loans, which is a very exciting news for new Home Loan buyers, whereas, this news can upset the existing Home Loan applicants.

If you are one of the existing Home Loan buyers, the announcement can be disappointing. You are majorly stuck in a situation, wherein, you are paying a high rate of interest compared to new Home Loan buyers. In such a situation, a Home Loan balance transfer can help you.

What Should You Know About Home Loan Balance Transfer?

What is a Home Loan Balance Transfer?

A balance transfer helps you to transfer your loan account from one financial institution to another. You can either transfer your loan to another financial institution or can choose another loan scheme offered by the same lender. By using the facility of a balance transfer, you can avail a low rate of interest.

Do’s of Balance Transfer:

  • Many people often opt for Home Loan balance transfer when they find another financial institution offering a low interest rate than theirs. While transferring the loan, it is essential that you compare the interest rates offered by all the lenders and then opt for the right one.
  • Before opting for a balance transfer, it is essential that you negotiate with your existing lender.
  • In case if you need a top-up loan and your existing lender disagrees to do so. You can opt for a balance transfer wherein you can consult another financial institution which provides you with a top-up loan facility along with your Home Loan balance transfer.

Don’ts of Balance Transfer:

  • The processor of a balance transfer is similar to availing a new Home Loan. The documents required are also similar, except the lender asks for a No Objection Certificate (NOC). While getting your Home Loan transferred, it is essential that you collect all the documents from the existing lender.
  • In case your Home Loan is on the edge of maturity, then it is suggested to not to go for a balance transfer as this will extend your loan tenor.
  • Don’t forget to check the pre-payment charges charged by your new lender. When comparing the interest rates, make sure that you also check the pre-payment charges levied by your new lender.

A Home Loan balance transfer can be a great option if your current lender is charging you a high rate of interest or you have availed a loan before demonetization. By getting a balance transfer, you can not only benefit with the low rate of interest on Home Loan but can also gain from different schemes offered by your new lender. The dos and don’ts mentioned above can help you carry out the balance transfer process without any mess.

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