Things to consider while doing home loan transfer to another lender
Are you still paying a higher current home loan interest rate despite rates going down?
Do you see no respite from higher home loan interest rate charges and save?
If yes, then you do not need to worry!
You can simply switch your current home loan account to a lender offering a lower rate. It is under the home loan balance transfer facility.
But, before going ahead with it, you should check out a few parameters.
Read on and know more!
- Check if it is right to switch your home loan
Financial experts suggest that home loan borrowers should switch their loans only if the current home loan is more than 10 years old. In the initial tenor, a large part of the EMI comprises the interest. Hence, a home loan balance transfer is feasible only when a tenor of 15 years or so is left. Another thing to note is that the new home loan interest rate is at least 25 BPC less.
2. Check out the total cost involved
You should also consider the penalty and other extra charges that you may have to pay for a home loan balance transfer. Both lenders may ask for a charge when you decide to go for a home loan balance transfer. If it is more than what you will save, then it is better not to go for a home loan balance transfer.
3. Top up loan size
Many lenders provide you with the facility of the top up loan to help you cover every need of your life. Hence, you should know if the size of the top up loan size is larger or not. The top up loan interest rate and the repayment tenor is almost like your existing home loan account.
If you are able to consider these points, then your home loan balance transfer will be smooth and hassle-free.
