Home loan balance transfer is a facility that borrowers can take advantage of to switch lenders. With this, they can move their outstanding loan balance from one financial institution to another.
Before opting for this facility, borrowers should know a few points about the same –
It is used to curb high interest rates
Home loan borrowers primarily opt for a home loan transfer to seek lower interest rates from other lenders. It may so happen that their current financial institution has increased the rate while another one is offering lower rates.
Borrowers may need to pay a fee
The current lender will charge a fee to provide the home loan transfer facility. The new financial institution may also impose a fee. Hence, borrowers should evaluate their savings from the transfer before opting.
Beneficial time to opt is the early months
Home loan borrowers will save more on interest when they avail a balance transfer facility during the early months of repayment.
Some lenders offer a top up loan with this facility
Few Housing Finance Companies offer top up loans to borrowers opting for balance transfer. These loans come with no end-use restrictions and can be used to fund multiple necessities. The maximum amount available with these credits can go up to Rs.50 lakh.
Home loan customers planning to opt for a balance transfer facility need to keep these points in mind before availing it.
