Home Loan Transfer – The Concept and Benefits
3 years ago, Bharat Hiranandani, a lawyer by profession from Mumbai, had taken a housing loan of Rs.30 lakh from a leading bank for a tenor of 20 years at a rate of 9%.
His was a fixed rate of interest and this made him not saving up anything on interest when the bank went on to reduce its home loan rates in the subsequent months. Every time Bharat requested his bank to let him convert his interest rate to floating ones, it was rejected.
Frustrated, he decided to apply for home loan transfer and switch his home loan account from the lender to a non-banking finance company (NBFC), offering a lower rate.
As a result, opting for a home loan transfer also meant paying lower EMIs, saving on home loan interest rate and also help save money.
Let’s provide some details of the home loan transfer facility:
What is a Home Loan Transfer?
Home loan balance transfer is nothing but a unique feature that helps any existing home loan borrower to switch his/her home loan account from one to another lender. The primary reason for opting for the home loan transfer is – availing of a lower housing loan interest rate – being provided by another lender along with customer services such as top-up loans and more.
Why should You Opt for The Home Loan Transfer?
By now, you may be clear on how a home loan transfer helps you beat the burden of a higher rate of interest and lets you pay a lower rate upon switching of the account. Other than helping you save money that you would have paid for still continuing with an old lender, there are many benefits of the home loan balance transfer, have a look:
- Helping you lap up a lower home loan rates – If you see that there is a significant fall in the home loan rates and if you are still paying a higher home loan rates, it’s time to opt for the home loan balance transfer and save money.
- Let you enjoy a longer repayment tenor – By opting for a home loan transfer facility, you can also extend the home loan tenor. Yes, if your current lender is not letting you enjoy a longer tenor, you can switch the loan account to a lender offering an extended tenor.
- The convenience of the top-up loan–When you opt for the home loan transfer facility, then the new lender may offer you a top-up loan as well. The amount of the top-up loan may be up to Rs.50 lakh at a lower rate and a longer tenor to help you fulfil other needs in life.
- Better customer care services–New age lenders also let their customers avail the better customer care services in the form of the digital customer portal. You can always access all loan details all time and from anywhere as the lenders provide the digital customer portal facility to the customers.
- Your monthly EMIs drop – With the facility of the home loan balance transfer when you enjoy a lower home loan rate, it helps you pay a lower EMI, letting you save more.
- Helps improve the CIBIL Score – With home loan EMIs becoming affordable, your chances of defaulting diminishes and this leads to a better Credit Score.
The Bottom Line
The concept and the benefits of the home loan transfer are revealed to you. If you are still paying a higher home loan rate, you now know what to do, right? All the best!