It’s important for you to know that rates of interest tend to change often due to fluctuations in the market. And as per RBI regulations, lenders lower their interest rates. Home loan balance transfer has been working tremendously in favour of a lot of investors these days. They are making a feasible decision of switching from one lender to another to make the most of lower interest rates.
Not only will the new lender approve the takeover of your new home loan, it will also make the payment of the complete outstanding amount to your existing lender. When the current lender receives the amount pending from your end, they release the documents of your property and issue you (the borrower) a no due certificate.
What are the Benefits of a Home Loan Balance Transfer?
- Good Track Record May Get You Decent ROI
You can always consider the negotiation of the terms and conditions of the home loan by stating your payment track record and credit score. That way you may get a lower ROI. You may even get great benefits as provided by the existing lender.
- Reduced ROI (Rate Of Interest)
Do you know why people opt for a home loan balance transfer? This is because they get much lower interest rates. These rates will lead to reduced EMI (Equated Monthly Installment). Thus, you get to save every month.
- Get a Top-Up Loan
There are several financial institutions that offer a top-up loan upon the transfer of your home loan. You can take complete advantage of these loans at cost-effective rates and use them to pay out your current debts.
In home loan balance transfer, the complete principal loan amount (not paid as of yet) is transferred to another bank for a lower ROI (rate of interest). Doing so will work to your advantage as you get to make effective use of interest rates as offered by a number of banks. And if you have not defaulted even once in paying your dues, then this process becomes an easier affair.