Balance transfer of a home loan allows the person to move his current home loan to a new Bank/NBFC. Yes, you can use this facility to switch from one bank to another. There can be several reasons for this but the main reason always is that the new lender provides a lower rate of interest. Hence you can save on a lot of interest money when you have many years remaining to repay the loan amount.
Such a facility can help those who have taken a home loan. This is because a home loan usually goes as long as 15-20 years. Hence a balance transfer can be taken at the right time when interest rates fluctuate towards the buyer’s benefit. Below we have listed few such benefits of going ahead with a home loan balance transfer:
Interest Rate Differential – When you opt for a balance transfer, you want to shift your current loan from the old bank to the new bank. This is because they are offering lower rate of interest. This means you will save interest money for the remaining tenure of the loan. But before you take this step, it is very important that you calculate if you will save more by going ahead with balance transfer or no.
A good credit score pays dividends – Maintaining a good credit score always helps as the lender will view you as a credit worthy person. Hence you will not only get your loan approved quickly but also get better terms and benefits than other customers. The Bank might lower the interest rate for you even further, waive off certain charges related to the loan which will help you save more money.
Get a Top-Up loan facility – When you transfer your current loan from the old bank to the new bank then they can offer you a top up loan facility. This facility depends upon certain factors but ultimately is decided by the new bank. The bank can give you this facility based on your loan amount and credit score. These loans are basically for a shorter term and can be used for debt consolidations and clearing any other short term obligations.
Hence, using a home loan balance transfer, you can save money for a better future!