A. Home loan balance transfer is a facility that allows home loan borrowers to transfer their outstanding home loan to a new lender for lower interest rate or better loan terms. Almost all lenders offer the home loan transfer facility to their customers. Paying your loan EMIs regularly is one of the factors that help you enjoy loan transfer facility. But before going for home loan balance transfer, carry out a cost-benefit analysis. Calculate the difference between the interest rates offered by the two lenders, the amount of the loan left unpaid and the remaining tenure.
Home loan balance transfer is not an ideal option if the outstanding loan amount is low, if only a few repayment years are remaining or the difference in the interest rate is leading to negligible savings. Also, do not forget to consider processing fee charges, which the new lender would be charging for balance transfer.
A. The key reason for transferring a home loan from one lender to another is to benefit from a lower interest rate provided by the new lender.
A. Yes. The maximum balance transfer amount is equal to the outstanding amount of the home loan.
A. You must not consider shifting your home loan if one of the following is applicable in your situation:
A. In case your credit score has dropped significantly since you applied for the initial home loan, it might affect the process. As the balance transfer process works similar to applying for a new home loan, your credit score and history would play a key role in determining your eligibility for the home loan balance transfer.
A. Most banks today wont have a prepayment penalty in the first place. But if your bank has it, then you can ask your new lending bank to take it into account. This will vary from bank to bank.
A. For instance, if the property value of your home climbs much higher from its original price at the time you took the home loan and you might require more finance for your home renovation. In this situation you can add to your loan. This is called a loan top up.
Yes, depending upon your eligibility, the loan issuer can offer you the option to top up on the home loan to be transferred to the new bank but there may be processing and legal charges applicable.
A. Processing fees on transfer of home loans range from 0.5% to 1% of the loan amount.
A. The precise reduction in EMI varies based upon:
A. The simple steps following below are involved in transfer of your loan: