Buying a house is a dream come true for everyone. It fills the owner with a sense of pride and protects them from monthly rent each month. However, an individual must arrange a substantial amount of money to buy a house, which they often get from a Home Loan. It allows the borrower to pay the property’s price in easy EMIs spread across loan tenures of up to 30 years.
However, choosing the right one becomes crucial with several financial institutions offering housing loans. Aspiring borrowers must research and compare the loan schemes before making the final decision. But despite due diligence, many people end up selecting the wrong lender. Another loan company might also offer a better loan deal for the borrower’s requirements in the future. What should you do in such a situation? Use the Home Loan balance transfer facility to transfer the existing loan balance to a new lender.
Here we will discuss the reasons for choosing this facility.
Reduced Interest to Pay on the Loan Balance
Getting a lower Home Loan interest rate is the primary reason most people transfer their Home Loan balance to a new lender. With this option, borrowers can transfer their outstanding loan balance to another lending institution offering a lower interest rate than the existing provider. By doing this, they will need to pay a reduced interest cost on their remaining loan balance, decreasing their EMI amount. Some also transfer their loan balance to switch their interest rate type from fixed to floating or vice versa.
Easier Repayment Plan
A lower interest rate is one of many reasons for transferring a Home Loan balance. Some borrowers may also get easier repayment loans with the new loan provider. The repayment terms and conditions may vary between lending institutions. For instance, a borrower might get a more convenient loan tenure with the new loan company than their existing one. Moreover, the new company might have more flexibility with their repayment schedules and EMI dates. So, switching to such lenders saves borrowers from financial stress and hassle. That’s a good reason many people opt for a Home Loan balance transfer.
Get a Pre-Approved Loan Offer
Many loan companies announce pre-approved loan offers to attract more customers. They provide greater discounts on their housing loan interest rates, no prepayment charges, etc., along with numerous other beneficial schemes to convince borrowers to transfer their existing loans. Borrowers looking for a better offer must keep an eye on the pre-approved loan schemes that various lenders announce from time to time. If an offer eases the Home Loan repayment plan or enhances their loan experience, they may consider transferring their Home Loan outstanding balance. Check the new lender’s Home Loan documents list and fulfil their requirements to qualify.
Top-Up on the Home Loan Amount
If an existing home loan borrower falls short of finances, they might need a top-up on their Home Loan. It helps fulfil extra requirements to buy a housing unit. While some loan companies offer the top-up facility on Home Loans, others don’t. If the existing loan company does not offer a top-up facility, the borrowers may consider transferring their outstanding loan balance to another lender that provides it.
Better Customer Services with the New Lender
Borrowers may also transfer their loan balance if the new loan company offers them better customer service than their existing lender. For instance, not every lending institution provides a 24×7 customer care centre, online EMI payments, complete account tracking online, or a smartphone application. In today’s technologically advanced world, if a borrower still needs to visit their branch office to pay the EMI each month, they may consider transferring their loan to a new company for enhanced convenience and better service. Many modern NBFCs offer easy balance transfer options with minimal Home Loan documents list.
These are the several reasons for using the Home Loan balance transfer facility. With proper research, a borrower can avail of many benefits, including longer loan terms, competitive interest rates, and round-the-clock customer support. However, the borrowers must take time to decide whether a balance transfer is a lucrative option since they may need to pay hefty foreclosure and prepayment charges to their existing lenders. Consider the pros and cons before finalising a decision.