Home Loan Balance Transfer – The Way to Save Money!
A Home Loan balance transfer can help you indulge in saving money on the Home Loan interest rate. It also lets you raise extra funds to close high-cost credits such as a personal loan or a credit card debt.
What happens when you switch on your LED bulb when it dark in the evening? Yes, the brightness hits you with its awesomeness and brings cheers and happiness. Similarly, a Home Loan balance transfer also works like that. Confused? Let’s clear the air now!
Every month the first day is a great day for all employed professionals who have their salaried credited and cheers up their mood, and there is a lot of positivity around. But, many a times, it goes away by the first week or so of the month because many bills are paid along with the existing loan EMIs.
In order to continue with the lifestyle that one enjoys, it is very vital to manage and handle well the biggest monthly expense, the EMIs.
During the time if you get sunshine in the form of a Home Loan transfer to switch it to another lender offering a low-interest rate leading to a lower EMI, what would be your reaction? You will take a sigh of relief that you will now save some money with a balance transfer.
Benefits of the Home Loan refinance
It is a floating interest rate era where creditors don’t take much time to increase your Home Loan EMIs when the market conditions change, but won’t pass on the benefits back quickly when the rates are back to normal.
Indulging in a Home Loan balance transfer is a great idea to reduce the interest rate. It also lessens the loan repayment monthly outflow. The scheme also comes with zero foreclosure and pre-payment facility and also the switch cost is almost negligible, a borrower can also get more funds, if needed, against the same property with a top up loan.
The Home Loan refinance is a fabulous debt restructuring tool because you can divert the saving towards the closure or speedy repayment of your credit card or personal loan accounts.
Objectives of the Home Loan balance transfer
There are basically three goals of a balance transfer – dropping the EMIs, reducing the entire Home Loan interest rate outflow and saving the money or raising the capital for some other needs.
Before opting for a switch, you can take the help of a Home Loan EMI calculator to know about the exact EMIs that you will pay to your new lender. Compare the amount with the EMIs that you currently pay and if you see saving, then only switch the account.
Factors to consider before hopping on a Home Loan balance transfer
Before going for a Home Loan refinance, make sure to assess and consider the following points:
- The tenor of your new loan
- Additional terms and conditions laid down by your new lender
- Fees that you need to pay to your new creditor
- Any government charges
- What amount of saving you will make on your new EMIs?
- Are you getting additional loan amount in the form of the top up loan?
- Will you get any special benefits such as the 3 EMI holiday feature?
The Bottom Line
A Home Loan balance transfer will surely help you save money only if you consider all the above elements and determine if the switch is really worth a move! Don’t do things in haste, take your time, do some research and then only decide!
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Category: Saving Money
