Prices of land and the home are increasing day by day. Every individual wants his own house but buying a home is not an easy task because purchasing or building a home is a huge undertaking as it requires lots of investment. The home loan helps in fulfilling the dream of having your own house. Many Banks and Non-Banking Financing companies (NBFCs) are offered home loan at the best rate of interest. In recent years demands for home loans increases multiple time, many individuals have a different expectation when they come to a home loan. Due to this, many banks and NBFCs have come up with different types of new home loan schemes. Sometimes, most of us feel that we are paying higher EMIs and as a borrower, if you feel that banks are charging a higher rate of interest then you can choose the option of a balance transfer. A balance transfer is transferring your existing loan from one bank to another bank. Almost all banks and NBFCs offers this balance transfer facility. Most of us opt for balance transfer as it is available at a lower rate of interest but with the rate of interest, we should consider many other things.
Several things you should figure out before transferring your home loan are:
One of the important things you need to check before opting for a home loan balance transfer is processing fees. When you transfer your existing home loan to another bank you are required to pay a processing fee. This fee ranges between 0.5% to 1% which varies from bank to bank. The processing fee is an additional cost that you have to pay if opt for transfer of loan. You should always go for a lower processing fee.
It is crucial that you should check out the prepayment charges that have been levied by your lender if you decide to pre-pay the loan amount. There is no prepayment penalty on the floating home loan rate but if you have a fixed rate of interest, you would be charged prepayment charges up to 2% of outstanding principal. So, check carefully before you decide to prepay your loan.
Know about lender
There are many banks and Non-Banking Financing Companies (NBFCs) that are competing in the market and are ready to lend you money. Each of these lenders has made their reputation in the market. You should be aware of the services of the lender. So, it is always advisable to you go through the reviews and testimonials on several platforms as choosing a trustworthy lender is very important.
If you planning for the transfer of your existing home loan, you must ensure that you should do it as early as possible, mostly in the first half of the tenure because transferring home loan in the second half of the tenure is worthless as most of your interest led EMI payment has already paid. So, try to switch early in the tenure.
Read all terms and conditions
You should read all the terms and conditions of your new lender because the low-interest rate seems eye-catching but it is essential to aware of all the terms and conditions of the new users.
If you think that you are stuck up with a bank who is charging a higher rate of interest then you have a better option, choose a transfer of your existing home loan from one bank to another. This process is known as a home loan balance transfer. Almost all banks and Non-Banking Financing companies (NBFCs) offers this balance transfer facility. It is very attractive in recent years because of its lower rate of interest. Though the lower rate of interest is eye-catching, you should check some other thing before opting home loan BT. Some of the important things are a processing fee, prepayment charges, etc. One of the important things you should check before opting for the home loan is processing fees. This fee ranges between 0.5% to 1% that varies from bank to bank. It is the additional cost that you need to pay if you opt for the balance transfer. You should know about the lender before going for a home loan because the lender has made their reputation in the market. You should be aware of all the services offered by the lender. It is advisable to cross check the reviews and the testimonials to choose trustworthy borrower. One more thing is if want to switch your home loan, you should take this decision as early as possible because if you are choosing balance transfer in this second half of the tenure then it’s worthless to choose it because most of the interest you already paid. So, these are the things you should check before going for home loan balance transfer.