How to save money by opting for home loan balance transfer

Home loan balance transfer is the best way to save on interests. By transferring a home loan to a provider who offers you a lower rate than your existing provider you can save on your EMIs. There has been a dip in the home loan interest rates post demonetization. This happened because a huge amount of cash was deposited in bank accounts across the country. With this surplus of cash banks could afford to lower their interest rates by a significant amount, thus making it cheaper for people to avail of home loans.

Post the demonetization, Home Loan Interest Rates have gone down by as much as 50 basis points. This means that those who apply for home loans now will get much better interest rates than those who have existing home loan. If you’re one of the people who already have a home loan do not fret, you too can avail of the benefits of this dip in rates.

How? By opting for a home loan balance transfer! A home loan balance transfer can help you save a substantial amount of money if you choose a provider who is offering a much lower rate than your current provider. It also only makes sense for you to opt for a transfer if you have a long tenure left to repay your loan.

If you’re considering a home loan balance transfer in the near future, here are some essential things you should know about it.

1.  Savings is the main reason for transferring home loans. But make sure that you opt for a Home Loan Balance Transfer only if the total savings in interest payout is substantially higher than the cost incurred while transferring the loan. Usually, the new lender will charge various fees, such as conversion fee, processing fees and administrative charges during the loan transfer.

2.  Transferring your home loan to a new lender is similar to availing a fresh loan, where the new lender will have its own set of terms and conditions. You can use it to re-set your loan EMI and tenure and top up as well. Opt for a home loan transfer if your existing lender is not allowing you to reset the terms and conditions of your loan.

3.  Usually banks and NBFCs provide top up loans to existing borrowers. These are just like personal loans but their interest rates are lower than a separate personal loan. One may require a top up in case of funds required for an emergency or in case of a home loan for renovations. Transfer your loan only if your current provider is not allowing you a top or if the new provider is offering you a better rate.