How you Should go About Transferring your Home Loanby Litty Jose Finance Analyst
With the huge amounts of funds deposited into banks during demonetization in India, banks have reduced their home loan interest rates a great deal. Leading this set of banks is SBI who has reduced their housing loan interest rates by 50 basis points making their current rate is 8.5 per cent. Following SBI other banks and NBFCs too have reduced their rates, one whom has reduced its housing loan interest rates by 45 basis points. These rate cuts will mainly benefit new borrowers. But this doesn’t mean that existing borrowers cannot benefit from these reduced rates at all.
At the current rates and favourable market conditions, opting for a home loan balance transfer might just help you with your loan repayment. If a bank other than your own is offering you better terms and lower housing loan interest rates then your current loan provider you should definitely consider.
If you’re still considering why you need to opt for home loan balance transfer then here is a few more reason why you should.
Savings is the main reason for transferring home
loans. But make sure that you opt for a home loan balance transfer only if the total
savings in interest pay-out is substantially higher than the cost incurred
while transferring the loan. Usually, the new lender will charge various fees,
such as conversion fee, processing fees and administrative charges during the
loan transfer. Only when you have calculated all the costs and charges should
you decide whether transferring your home is in your best interest.
2. Transferring your home loan to a new lender is similar to availing a fresh loan, where the new lender will have its own set of terms and conditions. You can use it to re-set your loan EMI and tenure and top up as well. Opt for a home loan transfer if your existing lender is not allowing you to reset the terms and conditions of your loan.
3. Usually banks and
NBFCs provide top up loans to existing borrowers. These are just like personal
loans but their interest rates are lower than a separate personal loan. One may
require a top up in case of funds required for an emergency or in case of a
home loan for renovations. Transfer your loan only if your current provider is
not allowing you a top or if the new provider is offering you a better rate.
This article is about
how you should go about transferring your Home Loan. I'm a financial advisor with an experience of
more than 5 years. I have worked for topmost financial firms in India. A post-graduate
in business economics, I'm a writer of Business and Finance industry.
Created on Aug 29th 2017 03:01. Viewed 519 times.