Balance Transfer of your existing home loan is very easy. If you are paying higher rate of interest or higher EMI amount then it is very beneficial. These loans are of long duration like 10 years-15 years. So, savings of 100-200 per month can also contribute a huge amount. Keeping the benefits of it Our experts at Loan Guru brings you a comprehensive list of top 10 tips on how to transfer your balance principal loan amount easily.
Why and when you should go for Balance Transfer?
- It gives you get lower rate of interest
- You may increase or decrease loan duration
- Top up loan amount may be taken to meet your requirements like home renovation etc
- If the service quality of current lender is poor
- When you have to lower your monthly EMI due to cash crunch
- You have to refinance the additional construction in house
- Due to your transfer at different location
Now lets see the tips which our loan experts have listed for the balance transfer.
Top 10 Tips for Balance Transfer Of Your Home Loan
- Compare the best offer-The market is full of competition for reliable and regular customers. You will get many lucrative offers from lenders. Now you have to compare their offers for best deal. Compare the common things and differences you can figure out. Consider your benefits as prime concern and then shortlist the best one.
- Eligibility criteria of new lender- You may get offers but are your eligible, will they surely give you the balance transfer, these depends upon your eligibility criteria. You check check all the points mentioned in eligibility to avoid any disappointment at the time of loan transfer application rejection.
- Terms and Conditions of repayment, pre-closure –When you fill the application form, read and cross the terms and conditions of loan repayment, fore-closure, legal limitations, formalities for better understanding the clause of defaults, penalty or misconduct.
- Check the processing fees & conversion charges – There are various charges like stamp duty, conversion charge, processing fees, foreclosure charges defaults which cost additional amount. You need to check these all with your lender.
- Repayment terms and conditions – Peace of mind can be acquired when you know the full repayments terms and understand all the conditions of payments. Like when is the EMI date schedule of payment, how long is the loan duration, how the EMI is changing for flexi loans, penalty charges, conditions of future repayments and others.
- Difference in monthly EMI and total loan- When your lender is changed, the EMI amount and total amount also changes. You should compare the overall EMI amount and Total amount of loan including interest amount between new lender and old lender. Difference must be higher if the benefits are higher.
- Early transfer of loan is beneficial- Timing of balance transfer is important. In the initial day of loan repayment, interest is higher and principal is lower in EMI amount. Thus, Transfer at an early stage is good as you have paid less interest amount. The more EMI you have paid the more interest you have paid. Now with every ascending month you pay increasing principal in your EMI.
- Take permissions to mortgage in advance- When you purchase a flat or house from builder, then you have to take permission from your builder for mortgage to balance transfer to the new lender. This is mentioned mostly in your terms and conditions of sale deed or purchase documents. Take these permissions in well advance to avoid any last minute rush.
- Documents should be ready for application of balance transfer- When you have all the documents in place, you should prepare a set of these documents for submission along with your loan application for balance transfer.
- Check the service quality of new lender-If you are not satisfied with the services of your current lender then you should look for the other lenders who provide better services. There are lenders who even provide home pick-up services to senior citizens. So, you should consider change of lender if the quality of service is not good of your lender. The private lenders are better service provider compared to government or public sector lenders.
Now keeping these tips in mind, you should opt for balance transfer of your existing loan and enjoy the benefits. Our Loan Experts at Loan Guru will always guide you for the best. You may submit your queries in the comment box below. To read more about Home Loan please Click Here