5 Things to Consider if You’re Planning to Transfer Your Home Loan to a New Lender

Buying a home is a huge decision and transferring it to another lender is an even bigger one to make. There are many factors to keep in mind when you decide upon Home Loan Balance Transfer to a new lender. Are you getting frustrated with high-interest rates and charges? Is your high EMI (Equated Monthly Instalment) turning to be a big burden for you? If you think that these thoughts are continuously crossing your mind, it is probably a great idea to transfer your existing Home Loan to a new lender.

There are balance transfer offers available in the market with different financial institutions. You need to study the ones that are feasible for you and then proceed with the transfer formalities.

Where Can I Get a Home Loan Balance Transfer?

Different banks and financial institutions have various Home Loan Balance Transfer offers. There are certain aspects that you need to consider before you finally wish to act upon your decision. Attractive interest rates, customized repayment and prepayment options, branch network to make the transfer easier, as well as no hidden charges, are certain crucial points to bear in mind.

Whether it is a transfer from your bank to another bank, each will have its own set of rules and regulations that need to be borne by the borrower.

Let us understand the 5 things to consider if you want to transfer your Home Loan to a new lender:

· Eligibility

This is a vital factor when it comes to transferring your Home Loan balance to new lenders. Certain banks have this facility only for salaried people. Some banks do not offer this facility. Most banks levy additional charges or fees for transferring your outstanding home loan amount whereas some banks also do it for free. Hence, make sure you ask your Home Loan lender about the charges associated when you opt for the facility at the time of availing a loan.

· Market Rates

Different banks have different charges that determine its lending capacity. You should check whether they offer fixed or floating rate and the benefits attached to these plans. The entire idea is to conduct a holistic analysis of the different interest rates attached to Home Loans and balance transfer offers. Opt to transfer your loan to a bank that charges lowest interest rate so that you can save more.

· Negotiate with Your Existing Bank

It is better to speak with your existing bank before attempting a balance transfer. Certain times you get stuck in the rigmarole of paying higher interest rates without realizing that the problem can be resolved by having a straight intense conversation with your bank. Some banks relook at the interest rates and lower it or lower the EMI (Equated Monthly Instalment) in order to ensure their customers do not leave their bank.

This will help you to save a lot of time, energy and paperwork that needs to be vested in transferring a Home Loan to a new lender. Banks consider lowering interest rates or EMIs based upon the borrower’s creditworthiness and past payment records.

· Cost of Transfer

Like we highlighted, every bank has their own specifications when it comes to accepting a transfer of Home Loan. There may be nominal fees attached to the home bank as well as the new bank, where you are considering the balance transfer. Understanding these charges and doing a thorough calculation will help you to analyse whether the transfer is feasible or not.

If you have a short period of Home Loan remaining, it would not ideally make too much gumption to undertake a loan transfer.

Also Read : Why prepaying a home loan may be the best investment option in current yields scenario

· Terms and Conditions

You need to check the terms and conditions of your existing lender for transferring your Home Loan to another bank as well as with the new bank. Is the new bank willing to accept the remaining debt amount and offer you better interest rates and EMI options? Do you think they have better balance transfer offers than your current bank?

You also need to bear in mind that there are no check bounces in the past that will hamper your chances of getting a balance transfer of Home Loan. This will heavily affect your credit score, in turn making it difficult to improve your creditworthiness.

These are certain fine aspects that you need to weigh before finally going through with a Home Loan Balance Transfer. Unless the transfer is cost-effective and offers long-term benefits, don’t consider shifting from the existing bank.

Also Read : Here’s Your Guide to Check Home Loan Eligibility

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