A Home Loan usually involves a large loan amount and a long repayment tenor. Thus, it is in your best interest to have the most ideal terms for its repayment. Sometimes, once you start paying EMIs towards your Home Loan, you may find that you are unhappy with your loan provider’s customer service. You may also chance upon other lenders who are offering you a better rate of interest.
In such a situation, it is worth considering a Home Loan Balance Transfer from your existing lender to another lender. Doing this can have a profound impact on your finances and your loan borrowing experience. The most important benefit is that when you transfer your Home Loan to another lender with a lower interest rate, it becomes more affordable and cost-effective for you.
But before you decide, take a look at each of the benefits that carrying out a Home Loan balance transfer provider has to offer.
Reduce Interest Rate and Pay Lower EMIs:
This is one of the primary reasons why you should switch your Home Loan from your existing loan provider to another financial institution. When you transfer your Home Loan to another lender with a lower interest rate, the Home Loan EMIs also become lower. This helps you save a larger part of your income. In turn, you can use this to make investments, create a contingency fund, set it aside for retirement, or use it to boost your quality of living.
Save on Prepayment Penalties and Related Charges:
Prepayment and foreclosure allow you to reduce your financial burden as and when you have surplus cash. But, most banks and financial institutions levy hefty prepayment penalties and foreclosure charges on your Home Loan. So, if you want to make part prepayments on your Home Loan regularly, you may end up shelling quite a bit on these extra charges. But, when you shift to another lender that charges a nominal prepayment fee or levies no charge at all, you can save a tidy sum and use it to make a larger prepayment.
Make the Most of Fee Waivers:
Transferring to a new lender with a lower interest rate comes with its own charges and processing fees that cover the administrative and legal costs of making the shift. But, if you have a good credit rating then these processing charges may be waived off. This means that you can save money and use it to make prepayments towards your Home Loan or divert it towards meeting other financial goals.
Get a Top Up Loan as Extra Financing:
Apart from switching your Home Loan for lower EMI payments, you can also use the services of your new lender to get a Top Up Loan at a low rate of interest with the same long tenor that your Home Loan enjoys. This is a good option if your existing lender isn’t willing to give you more funds. You can use the funds from a top up loan to spend on your home or for any other purpose you require without any restrictions. But, note that this top-up loan will also require you to pay a processing fee and other charges. So, only opt for it if the new lender is offering you a nominal rate of interest, or if your existing lender isn’t granting you a top-up loan.
Experience Better Customer Service:
Poor customer service such as untimely loan statements and unresponsive bank managers can make the loan experience tedious and stressful. When you transfer your Home Loan, you can pick a lender that prioritises customer service. This way, you will be able to enjoy financial benefits along with great customer service.
Enjoy Add-on Facilities and Benefits:
Premium loan providers like Bajaj Finserv offer you exciting added benefits when you transfer your Home Loan to them. Apart from excellent customer service and a nominal rate of interest, Bajaj Finserv also gives you access to one-of-a-kind features like a Home Loan + or a 3-month EMI holiday. While the first option gives you extra funds to use for purchasing home fixtures and furnishings, the second helps you plan your finances with ease with a break of 3 EMIs on your Home Loan repayment during times when your finances are stretched. Secondly, Bajaj Finserv’s Home Loan also gives you property search and property dossier to better your home buying experience.
So, you can save and ao experience other benefits when you switch your Home Loan to another lender. That being said, it is advisable that you initiate a Home Loan transfer early on in your tenor. This will allow you to save a chunk of your funds and will ensure that the cost of shifting to another lender doesn’t outdo the benefits and savings.
I am a Financial Advisor with an experience of more than 7 years.I had worked for top Financial Firms in India and has been a visiting faculty at many reputed institutes. I have done my post-graduate in Business Economics, from Princeton University, USA. During my free time, I teaches children from marginalised sections of society and also work on my Blog.