Why should you choose a Home Loan Balance Transfer?
If you are the one who is still paying your home loan EMIs on the previous rate, then it’s time for you to go for a home loan balance transfer.
What is a Home Loan Balance Transfer? And how it Benefits You?
A Home loan balance transfer is a process of transferring your existing home loan from one bank to another in terms to avail better interest rate, terms, and other benefits.
High-interest rates have a direct impact on your finances and can prove to be an obstacle to your financial growth. Also, staying in debt for long can be stressful, and foreclosing your Home Loan before the tenure period can be the one thing that saves you. However, foreclosing a big-ticket loan is not easy for all, and opting Home Loan balance transfer can be the key that can help you out and save a lot of money for you in such a situation.
How Does Balance Transfer Work?
In a home loan balance transfer, the outstanding loan amount of your existing home loan is transferred to a new lender. And the new lender provides you with money to close your existing loan.
For this, the borrower needs to submit an application form with his existing lender requesting a balance transfer and needs to apply with a new lender as well. If the new lender approves the takeover of the existing home loan, the new lender will pay the outstanding amount to the existing lender and open a new loan account for the same amount with themselves.
Once the existing lender receives the outstanding amount, they need to release the property documents and also issues a no-due certificate to the borrower.
All these documents need to be submitted to the new lender and the borrower has to pay all the remaining EMIs to the new lender at their particular offerings.
Top-up loan amount:
Home loan balance transfer also comes with an additional benefit which is – the top-up loan facility. Once you go for a balance transfer you can also get some additional amount over and above your outstanding amount.
But, before you go for a balance transfer, here are few things which you need to ensure.
- Ensure that the remaining repayment period exceeds five years
- Ensure you have not defaulted on EMI payments with the existing loan.
- Ensure that you have all the property-specific documents ready.
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