Last Week, news broke out that NBFC’s in the market have increased their lending interest rates by a whopping 2%. Yes, this news shook the market and has brought along a lot of panic among the customers. Since this news, people have been recalculating how much they will have to pay as EMI now. At Ruloans, we study such trends and find the best way out which will benefit the customer. As per the current trend, we believe that the best solution for all the customers lies in “Balance Transfer”.
What is a loan balance transfer?
A loan balance transfer is when you can shift your current outstanding loan amount from the old lender to a new lender. You can do this because the new lender might be offering better interest rates and better terms and conditions. Also, for those who have a home, a balance transfer makes sense because of the longevity of the home loan. With shifting the loan to a new lender, you will pay a lower EMI until the tenure ends. This ensures you can save a lot of interest money.
However, taking this decision is not easy and only after careful consideration, must a customer take this step. To help our customers, we have made a set of few questions which a customer must ask themselves before transferring their home loan. They are mentioned below;
What Questions to ask before transferring home loan?
Is the deal worth it?
It is very important to understand that a balance transfer is not a joke. This process will change a lot of things and hence you need to be very careful. You have to calculate if moving your loan to the new lender will prove profitable to you. That means that the savings made from the new lender is more than the cost it will take to move the loan from the old lender.
New lender offering better terms?
Interest rate should not be the only reason of moving your loan from the old lender to the new lender. If the new lender can offer you better terms than the previous lender, this would be a good decision then. Terms could be related to interest free holiday period, no prepayment penalty, top up loan facility etc.
Do I Have a Better credit score?
This question can help you negotiate a better deal with the new lender. Having a low credit score will not help you while transferring the loan too. A lender would prefer looking at your credit score while determining your repayment ability. If you have a very good credit score, then you can negotiate with the lender to lower down the interest rates even further.
Hence before taking the decision of a home loan balance transfer, ask these questions and then plan accordingly.