Are you an existing Home Loan borrower who is unhappy with the services of your lender as well as the interest rates being charged? You are not alone to face this type of situation as there are many people who are still paying higher Housing Loan interest rates despite rates being down!
What’s the solution, then? Existing loan borrowers need not worry as they can avail a facility known as the Home Loan balance transfer and enjoy lower rates! Let’s provide you some quick insights into the same and tips to make it work for you!
What is Home Loan Balance Transfer?
Home Loan balance transfer is a facility that existing housing loan borrowers can use to lower their Home Loan interest rates and make it even more affordable! Suppose if you see that a lender is offering a lower rate, you can inform your existing lender that you want to go for it and switch your account to a new lender. By doing that, you can easily get the advantage of enjoying a better rate along with other facilities.
Tips to Work your Home Loan Balance Transfer
Home Loan balance transfer option need not always work though; you will need to make it work to your advantage. Here are some smart tips to do it!
1. Do your Research
Now that you are ready to switch your Home Loan account, you will need to conduct some research to know about the lender who is offering the best offer. Try to know about its performance from reviews on the internet and then only transfer the loan. Be sure to know hidden charges, terms and conditions and other things as well.
2. Collect your Vital Documents
Once you have opted for a new lender, ensure to be cautious with the application procedure which may require numerous documents. Thus, ensure to arrange all documents such as loan agreement, loan sanction letter, photographs, address and identity proofs, registration proofs and stamp duty. All these documents will be needed for a fresh loan in the form of the Home Loan balance transfer.
3. Be Ready for Verification
Once you submit all required documents to your new lender, prepare to be verified for all the submitted details including the Credit Score. Clearance of the verification is needed to walk ahead.
4. Ensure to Get all Approvals
Once you are done with the formalities, you will need to take the approval of your old as well new lender. You can submit an application for loan transfer to your existing lender and ensure that they provide a NOC to you. Submit it to a new lender so that they can offer you a clearance easily.
5. Ensure to be Aware of the Transfer Cost
Home Loan balance transfer will require you to pay processing and stamp duty charges along with some technical and legal, and verification charges as well. You may have to pay the penalty to your old lender. Thus, always be sure of the amount that you are paying and calculate if the transfer actually saves you money or not!
6. Ask if a Top Up Loan is Available or Not
Many lenders let you avail a Top Up Loan of up to Rs.50 lakh when you switch a Home Loan account to them. You can use it to cover other needs and pay a lower rate in a longer tenor to make it affordable. Thus, ensure to ask your new lender if there is a provision for a top-up loan or not!
The Bottom Line
Home Loan balance transfer is a good facility to help you lower down your overall cost of the Home Loan if you are finding your current rate too steep! Now that you are aware of the steps to make it work in your favour assess it carefully and apply today!
