Mr. Salil Chaudhary had taken out a Housing Loan some months back at interest rate of around 9%. He and his family were happy that they no longer had to live in a rented house. Everything was going well, and Salil was paying the Home Loan EMIs.
He visited a friend and found that he had also moved in a new home after availing a Home Loan. When he enquired the interest-rate, he got the shock his friend’s loan interest rate was quite low compared to his.
He was in a state of confusion as to what to do next, and that’s when his friend advised him that he can still reduce his Housing Loan interest rate with the help of a Home Loan balance transfer!
Yes, if you are an existing Housing Loan subscriber just like Sahil who would like to reduce his/her interest rate, even you can avail the facility of a Home Loan balance transfer. Let’s provide you some quick inputs about the same.
What is a Home Loan balance transfer?
When you see that your existing Home Loan lender is unable to provide you a better customer care service and even the rate of interest is higher, you can avail Home Loan balance transfer.
The process involves transferring your current House Loan account to from your current lender to a new lender who is offering lower Housing Loan interest rates . When you make the most of this provision, you save a significant part of your monthly income which you were paying earlier.
Tips for doing a successful Home Loan balance transfer
Before opting for a Home Loan balance transfer, consult your existing lender and inform him of your decision. They may lower down the rate of interest if they would not want to lose out on a customer. Yes, some reputed may oblige and offer you an adjusted Home Loan interest rate so that they don’t lose you.
If you see your existing lender not offering you a reduced rate, go to a third-party website and compare all offers from leading lenders and apply for one that suits your affordability.
Apart from availing a lower House Loan interest rate with a new lender, do not forget to read all the terms and conditions so that there are no issues later.
Try to compare the customer care services of both lenders. If your new lender is letting you manage your Home Loan account with an online account access, go for it.
Ensure that the new lender is letting you prepay the Housing Loan without any terms because some lenders may charge a bugger amount for the same.
Plan and be ready to re-submit all your existing Home Loan documents and other ID proofs to stay afloat.
Make sure that the saving that you are going to make is bigger than the penalty and other processing charges involved in the process of the Home Loan balance transfer
You must ensure to take prior House Loan approval from your existing lender before opting for a Home Loan balance transfer
Make it your duty to get all original Home Loan documents and complete all paperwork with your current lender before initiating the balance transfer
It would always be a good idea to avail a Home Loan balance transfer early in the tenor of your existing House Loan. Why? It could help you save a lot of money!
The Bottom Line
Yes, even if you are an existing Housing Loan customer, you don’t have to worry if you are paying a higher Housing Loan interest rate because Home Loan balance transfer is here to make your loan affordable.
Assess your affordability and other aspects as discussed above and make a move!