A loan balance transfer is one of the most effective ways to reduce the interest rate of an existing loan and avail other favourable terms of services. For instance, individuals can opt for a home loan transfer to facilitate the easy repayment of the outstanding loan balance.
Nonetheless, before opting for this facility, borrowers also need to consider several factors to leverage all of its benefits.
Right time to transfer
As per financial experts, the right time to opt for a home loan balance transfer is at the beginning of the loan repayment tenure when the interest rate generally remains higher.
Nevertheless, existing borrowers also can use a digital home loan balance transfer calculator to evaluate how much they can save by opting for this facility.
Negotiable interest rate
Another main reason that leads borrowers to transfer their home loan from current lender to a new one is to lower the burden of higher interest rates and eventually higher EMIs. It is, thus, crucial for them to know the current market rate and negotiate for a competitive interest rate.
Loan transfer charges
A home loan transfer also comes with certain charges that can sometimes prove to be costly. For instance, borrowers may need to pay a penalty fee to their current lender and a processing fee to the new lender. It is vital to calculate these charges while initiating a transfer.
Nevertheless, top lending institutions also offer a top-up loan along with this balance transfer facility.
Read Also: Balance Transfer: Examining the Right Time and Other Factors to Consider
