A home loan balance transfer is the process of transferring your existing home loan from one bank to another to earn interest rates, terms and other benefits.
High-interest rates directly affect your finances and may appear to be a barrier to your financial growth. Also, staying in debt for a long time can be stressful, and preventing your Home Loan before the term of office can be one of the things that save you. However, refusing to borrow big tickets is not easy for everyone, and choosing a home remittance can be the key that can help you and save you a lot of money in such a situation. Read more about home loan balance transfer.
How Does Measure Transfer?
In transferring the home loan balance, the outstanding loan amount of your existing home loan is transferred to a new lender. And a new lender will give you money to repay your existing loan.
For this, the borrower needs to submit an application form with his or her existing lender requesting the transfer of the remaining amount, and you need to apply with a new lender. If the new lender agrees to take out an existing home loan, the new lender will pay the remaining amount to the existing borrower and open a new loan account of the same value as them.
Once the existing lender has received the remaining amount, they are required to produce property documents and issue a non-refundable certificate to the borrower.
All these documents need to be submitted to the new lender, and the borrower must pay all the remaining EMIs to the new lender for his or her specific contributions.
Benefits of transfers of home remuneration:
Reduce Interest Rate and hence EMI:
One of the main reasons for choosing a mortgage loan is lower interest rates. When you pay high interest rates on your loans and other lenders offer low-interest rates, claiming a transfer helps you and allows you to transfer your loan to lower rates with a new lender. It further lowers your monthly EMI and thus saves you a lot of money.
It helps you find the best terms for your loans:
Different lenders offer different terms for their loan offerings. And in the event that you work with a home loan, the terms of which do not allow you to transfer your loan to a lender who offers the same loan on your own terms can help you.
Predictability and advance payment:
The Reserve Bank of India, with its 2012 mandate, has eliminated floating interest rates on domestic loans at floating interest rates.
However, for domestic loans at a fixed interest rate, banks are free to charge interest rates at a rate of 2% -4% of the balance.
Therefore, lenders with floating interest rates and who want to repay in advance or repay their mortgage should work for it.
Maximum loan amount:
Home remittances also come with an additional benefit which is – a higher mortgage loan. When you transfer the balance, you can get some extra money in addition to the amount you paid.
However, before you transfer the balance, here are a few things you need to make sure of:
- Ensure that the remaining payment period exceeds five years
- Make sure you have never paid EMI payments for existing loans.
- Make sure you have all the relevant documentation for the right asset.
Conclusion
Transfers are a great institution that helps you reduce your EMI / debt burden. Home remittances also help you lower interest rates, get higher loans, get more favourable terms on your loans, and customized offers in some cases.