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Do you want to switch your home loan account to a new lender offering you a lower rate of interest?
A home loan transfer is an efficient method for existing housing loan customers to reduce their loan cost and pay lower EMIs.
But before opting for the home loan balance transfer, it is vital to consider a few things. Read on!
- Know if you are eligible for a transfer
Your lender may not allow you to go for a home loan refinance. It may be because their internal policies and other aspects. Hence, if you are not allowed, you have no other option but to renegotiate current home loan rates.
- Negotiate for a lower home loan rate
Sometimes, you may be allowed for a transfer, but the cost of it may not be affordable. It is where you should negotiate with your current lender for a lower rate.
- Check the affordability of the home loan transfer
When you go for a home loan balance transfer, you have to pay processing charges to both your current and new lender. Thus, you should check if it is affordable or not. If charges are more than what you will save, you should not make the switch.
- Know about the credibility of your new lender
Is your new lender reliable enough? Has it a nice track record in the market? You should enquire about everything before going with a home loan balance transfer. You can do that by going through your lender’s reviews online.
- Know if your new lender offers a top up loan
Most lenders give you a top up loan when you switch your loan to them. It is a nice way to address your diverse needs without any restrictions. While repaying a home loan if you need money for other needs, a top up loan can help. The interest charges for a top up loan are on the lower side.
Considering all these discussed aspects can help you decide if you should go for a home loan transfer or not.
Did you know that you can pocket some amazing home loan tax benefits on your ongoing housing loan account?
Yes, a home loan is a fantastic financial solution that not only provides you with a considerable amount. You can also enjoy a lower home loan interest rate to pay reduced EMIs and save on repayments.
It is possible via availing of some home loan tax benefits. If you don’t know about the tax benefits of housing loans, this post will let you know!
- Savings on interest repayments
When you make home loan repayments, it comes with the interest and principal part. For repaying the interest amount, you can enjoy home loan tax benefits of up to Rs.2 lakh. It is for self-occupied homes, with no limits on rented ones. You should complete the construction of the property you have taken the loan to within 5 years.
- Savings on principal repayments
The principal part of the home loan EMI can help you enjoy an amount of up to rs.1.5 lakh. But to claim this home loan tax benefit, you must not sell off your home within 5 years of possession.
- Savings on stamp duty and registration charges
You can also save up to Rs.1.5 lakh for repaid stamp duty and registration charges. You can claim this benefit only in the year this expense is incurred.
- Savings on joint home loans
Applying for a joint home loan can help both loan holders to enjoy a deduction of up to Rs.2 lakh on the principal and Rs.1.5 lakh on interest. It can be done separately in their ITR. But to claim such home loan tax benefit, both also need to be the co-owners of the home purchased on the home loan.
Based on the type of repayments you make and more, it is possible to claim the discussed home loan tax benefits. You can do that from your total income and enjoy magnificent savings.
Almost everything is available and accessible online these days. And even financial products are no exceptions.
You can now apply for a housing loan online right on your lender’s website and save a great deal of time and efforts.
Yes, nowadays, a large number of borrowers are applying for a housing loan digitally.
If you wish to know what steps to follow to apply for a home loan online, here is a post to follow!
How to apply for a home loan digitally?
Applying for an online home loan is dead easy if you can follow a few simple steps:
- The first thing is to land on the website of the lender you wish to apply for the housing loan with. Click on the ‘Apply Now’ button. You will be taken to a new page.
- On that page, a new online application form will open. You need to enter your personal, financial and employment details on it.
- If you don’t know an exact eligible loan value, you can do that using the home loan eligibility calculator. To know a precise payable EMI amount, you can use the home loan EMI calculator. Such tools are available for free on a lender’s platform for free.
- You now have to provide details of the property you have shortlisted for buying.
- Now, you have to pay the online secure fee for booking available deals.
- The Relationship Manager of your lender will connect with you to take the next procedure forward. You have to submit the required documents after paying the secure charges processed on your lender’s portal.
- You can upload all scanned copies, and it will help in the authentication of your digital housing loan application.
If everything is good to go, you will get the sanctioned money into your bank account faster. The digital method to apply for a home loan here was a standard one.
The actual method may differ from lenders to lenders. Hence, you should ensure to know about it earlier and avoid hassles. Also Read: Top 10 Pointers To Follow Which Can Help You To Improve Your Home Loan Eligibility
A repo rate is a rate at which commercial banks in India avail of money from the Central Bank, the Reserve Bank of India (RBI).
They do that after selling their securities to the RBI. It is done to maintain enough liquidity during a cash shortage.
The repo rate is one of the key tools of the RBI to maintain inflation at check.
Let’s know about the repo rate more and changes in it in 2021!
How does the repo rate work?
When you avail of a loan, a lender charges the interest on the principal amount. It is known as the cost of credit.
Just like this, even banks borrow money from RBI in the event of a cash crunch.
They are needed to pay interest charges to the RBI for it. The rate of interest is what is known as the repo rate.
RBI keeps adjusting the repo rate in India as per prevailing market conditions and more.
At times, RBI also borrows money from banks to absorb the liquidity in the market. It is done when there is excess liquidity in the market.
Banks are able to enjoy benefits out of it by receiving interest for parking their money with the RBI. A reverse repo rate is increased during high levels of inflation.
Have there been any changes to the current repo rate and reverse repo rate?
Recently, the RBI announced that there would not be any changes to the repo rate and the reverse repo rate. Hence, the repo rate in India current stands at 4%. But, on the other hand, it is 3.5% for the reverse repo rate.
Any changes in the repo rate and a reverse repo rate lead to changes in the interest rate charged by your lenders on home loans and more.