An existing home loan plan being changed for revised terms is known as home loan refinancing. Now, you can refinance your home loan with the current lender if they agree to offer better terms on the loan plan. However, if they do not, the only option left is to opt for a home loan balance transfer. This transfer involves transferring the outstanding loan amount from one financial institution to another for better benefits.
Now, what are the benefits of transferring your home loan? Well, there are numerous reasons for borrowers to refinance their home loans. Let’s take a look at how transferring your home loan can be beneficial:
- Enjoy better service from the new lender
It is possible to face certain challenges with your current lender when it comes to your home loan. For instance, the loan statement that you had asked for is taking a long time to come in spite of repeated reminders. You might also not be quite satisfied with the lender’s customer service. In such cases, getting a home loan balance transfer can help out. You can pick a new lender after making sure of their services.
- Get a top-up loan
Many people are unaware of the fact that a home loan balance transfer is not just useful for getting better repayment terms. Did you know that it is also possible to get a top-up loan while refinancing the existing home loan? Lenders can also offer top-up loans to borrowers who are transferring their home loans. Do keep in mind to check the interest rate of the top-up loan before applying for one.
- Take advantage of the revised interest rate
While there are numerous benefits of refinancing a home loan plan, the revised home loan balance transfer interest rate is arguably the best one. Even a slight change in the home loan interest rates can make the EMI payments go much easier. This is why a change in the interest rate is most likely to be the primary reason why borrowers opt for home loan balance transfers.
- Clear the loan with a better repayment plan
If you are facing certain challenges with the current repayment plan of your home loan, opting for a home loan refinance can be a good option. This is because the new lender can offer a lower interest rate as well as a more suitable repayment tenure. It is advisable to make use of a home loan EMI calculator to understand the revised EMIs of the home loan. This will help in understanding if the new tenure is a convenient option.
Now, before going ahead with the transfer of your home loan, make sure to calculate the charges involved in the transfer, such as the processing fees. You should also check with your new lender about the documents required for home loan balance transfer. This will help in ensuring that the entire process of transferring the loan is a smooth one.