Home loan balance transfer, also known as lender switch, is a conducive solution to all high-interest rate home loan problems. People subscribed to the said type of home loans can find out the different lenders offering home loan balance transfer, foreclose their loans with the existing lender, and then switch to the new lender to avail the benefits.
Having said all that, you must be curious to know the benefits of opting for online balance transfer. So, without any further delay, below are the prominent benefits of switching your lenders.
- Your overall obligation goes down. In other words, the total interest and principal you were initially obliged to pay, goes down. This happens because the payable interest component on the remaining balance is recalculated according to the new rates (usually 4-5% lower than previous loan).
- The repayment time comes down given you continue paying the same amount as EMI. This, again, happens because your overall obligation goes down.
- You might get entitled with top-up loan facility which would allow you to borrow a considerable sum without paperwork for home renovation and other such expenses.
Things to do or remember before switching your lender.
- Try to negotiate the interest rates with your previous lender before moving on with new one.
- Make sure the timing of balance transfer is right. Most of the interest component of a regular home loan is paid back within the first three years. So, take a wise decision.
Lastly, check your eligibility for balance transfer before applying.