Taking a home loan makes your home buying process easier, but you can also look for a home loan that offers low interest rates along with other value-added services. In such a situation, you can transfer your housing loan to a lender who offers better services. This process of switching or transferring your home loan from one lender to another is called a home loan balance transfer.
When should you opt for Home Loan Balance Transfer?
Usually, you shift your home loan balance to another lender when you feel the terms of your existing lender are unfavourable and they are not ready to negotiate. Though you can have many reasons for the transfer, the main reason for the balance transfer is the high-interest rate. This could be due to the existence of various other reasons like stringent regulations, a lot of extra charges, and poor customer service.
Home loan balance transfer in the initial years of its tenure is the best to do. This is because the interest portion in each EMI initially is much higher than the principal amount. So, this is the time when you can get the most out of falling interest rates. Also, remember that you may have to pay a fee to the new lender to transfer the balance and pay the processing fee again. So, keep these numbers in mind, understand your total profit and take a decision accordingly. This guarantees you that your balance transfer will really help you in your savings.
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