A home loan balance transfer allows borrowers to shift their outstanding loan amount to a new lender offering lower interest rates and better deals. Individuals opt for this facility to save on the lending rate or expand the repayment tenor. Refinancing the loan amount offers individuals multiple other benefits. However, it needs proper planning.
Here are the few parameters that borrowers must consider before opting for a home loan transfer:
1. Remaining loan tenor:
Availing of home loan transfer in the second half of the home loan repayment tenor is not worth it. Borrowers must be sure that they transfer the loan amount during the initial stage of the tenor to reduce the cost of borrowing.
2. New lender’s terms and conditions:
It is vital to be well versed with the terms and conditions of the new lender and then transfer home loan amount.
3. Overall refinancing cost:
The primary objective of transferring loan principal is to reduce loan expenditure. Hence, borrowers should also consider other fees and charges apart from the housing loan interest rate associated with a home loan balance transfer.
Furthermore, borrowers must assess the credibility of the new lender before transferring the home loan principal. Therefore, doing a background check on the lender will help the borrower secure their financial health.
In conclusion, borrowers opt for a home loan balance transfer to minimise and save on the interest amount. Albeit refinancing the loan amount proves beneficial, individuals should factor in the pointers mentioned above before going for it.
