It’s likely that you’d have some experience in applying for a Home Loan. You might also be considering a Home Loan. Either way, it’s something that you can’t escape, not unless you have the cash to fund it on your own. Know what your options are when it comes to Home Loans, since it can be a slippery slope. It’s easy to mess up and land yourself in a scheme that won’t let you leave, and drains you of your financial resources.
Home Loans are notorious for giving you confusing interest rates and lengthy tenures. As far as the relationship between interest rate and tenure goes, it’s inversely proportionate. You want to check your financial standing and risk tolerance before signing on a Home Loan. Agreeing to a wrong term can leave you in serious debt.
No matter who you are or how many investments you’ve made, a loan scheme can put anyone off. It’s easy to fall victim to the wrong scheme and realise that you’ve signed for an interest rate that you can’t afford. You may have also received a loan amount that doesn’t cover your needs. This is where the idea of applying for Top Up Loan and balance transfer comes in.
Why Opt for Balance Transfer?
As you’re already aware, a Home Loan balance transfer is a process that involves the transferring of your Home Loan account from one bank to another bank. It’s done when the borrower finds a lender that provides a lower interest rate, good and friendly services, and a host of other benefits. It’s understandable why you’d want a balance transfer. If you’re in a fix, then you can consider this a viable option.
Here’s what happens in an ideal balance transfer. The complete unpaid principal amount is moved from your older lender to the new. This unpaid amount is given to the bank that sanctioned you the loan. The bank that the loan has been transferred to becomes the new recipient of the EMIs.
As with everything else, the banks do have processing fees and charges because the process of balance transfer is time consuming. But almost all banks across the country provide this facility, so if you have a good CIBIL score, there’s no reason that you’d be denied.
It’s important to remember that you should be ready to jump through a few hoops during this process.
How You can Apply for Balance Transfer
If you’ve set your mind to apply for a Home Loan Balance Transfer to another bank, then you can get started on the process. First, you have to calculate your savings, and if you feel the need to increase your principal loan amount, then go for a top up. Once that’s done, fill out a balance transfer form. You can usually find this online on the bank’s website.
If you’re wondering what the ideal situation for a transfer is, then that’s a bit difficult. If you are almost done with your payments, then the savings you’d get are minimal at best. But if you’re midway or early into the loan, then the savings can be worth the trouble. Look for the cost to benefit ratio. You’ll know if it’s right for you or not. Also, consider having your transfer request declined, since the bank will have their own criteria that you will have to go through. The process isn’t worth the time and money if you aren’t getting a good enough benefit out of it.