If you have taken a home loan a few years back, chances are that the current home loan plans are looking much better. This does not mean that you have lost out on a better deal by a few years. There is always an option of transferring your home loan from one lender to another, which is called a home loan balance transfer. This involves the outstanding loan amount being transferred to the new lender and the EMI payments beginning with revised terms.
Now, if you are not familiar with a home loan balance transfer, take a look at some of the top benefits that a borrower can enjoy by choosing to refinance their home loan:
- You can get offered a lower interest rate to ease EMI payments
Home loan borrowers mostly choose to transfer their home loans because they find a new lender offering a lower interest rate. Even if the difference in the interest rate is a slight one, it can have a significant impact on the monthly instalments you are currently paying. Therefore, getting a lower home loan balance transfer interest rate is quite beneficial as it can result in good savings.
- The new lender can offer a top-up loan
When opting for a home loan balance transfer, a lower interest rate is not the only benefit that borrowers can get. Often, the new lender can also agree to offer a top-up loan. This can help any borrower who needs to get a better repayment plan along with additional financial support. This loan that the new lender agrees to offer is called the top-up loan and a borrower can use the funds with no restrictions on its usage. Any personal expenses lined up can be taken care of with this loan amount.
- You can enjoy better services from the new lender
In some cases, it is possible that the borrower will not be happy with the service provided by their current lender. They could face issues with the pre-payment terms, customer support, or any other service. If they opt for a home loan refinance, they could choose a new lender after ensuring that the new financial institution is well known for its quality services. You can read customer reviews of the new financial institution before transferring your home loan to them.
- The new loan plan can have an easier repayment plan
You might be happy with all the services of the current lender; however, the existing terms of your repayment plan might not be the most preferable. In this case, going for a home loan balance transfer might be helpful. Apart from the above-mentioned benefits, it is also possible for the lender to offer an easier repayment plan. For instance, the new lender could give you an extended tenure to make the EMI payments easier.
Lastly, before transferring your home loan, make sure to use a home loan balance transfer EMI calculator. This home loan calculator will help in displaying the new EMI results. Based on these results, you can decide whether to go ahead with the transfer or not.
