In the modern-day era, anyone who dreams of buying or building their home usually opts for a Home Loan, and justifiably so. After all, purchasing or constructing a home requires an abundant amount of money. While a prospective homeowner may have some money saved for this purpose, lending the remaining from a bank makes things rather convenient. Moreover, most banks offer Home Loan amounts for an extended period, usually 20 years and even 30 years in some cases. This ensures that the Home Loan borrower has sufficient time to repay the loan in the form of small, affordable EMIs.
That being said, in this extended period of time, one might often come across Home Loan offers from other banks or lending institutions that are more cost-effective, thanks to lowering interest rates in the current scenario. In this case, a Home Loan borrower can opt for a unique facility known as Home Loan Balance Transfer.
If you’re contemplating a Home Loan in the near future, here’s why you should plan Opting for a Home Loan Balance Transfer, right from the very beginning, even if you don’t see any lenders offering lower interest rates than your own currently.
When you opt for the HLBT facility in the early years of your Home Loan and transfer your outstanding loan to a new lender in exchange for a better interest rate, the cost of your Home Loan will significantly decrease.
As you may already know, an EMI comprises of two components – Principal and Interest. Since your new lender will offer you a lower interest rate, your EMI will consequently become smaller, thereby reducing your financial burden on a monthly basis.
You can then use the subsequent savings towards other investments or expense heads.
In today’s age of increasing competition amongst various commercial banks and housing finance companies, the customer often emerges as the winner. When it comes to opting for HLBT, even when there is an insignificant difference between interest rates between your current and new lender, you can ask the new lender to at least offer you better repayment terms. The lender will be happy to oblige you in exchange for your account.
Even better, you can negotiate the terms with your current lender, based on the prospective offer by a new lender. In all likelihood, your existing bank would be willing to tweak the repayment terms in your favour in an attempt to retain your account.
The cost of PNB Home Loan Balance Transfer or that of any other leading bank is largely dependent on the prepayment and foreclosure charges levied by the bank. If you consider using the HLBT facility right at the onset of your search for the best Home Loan offers, you can choose a product wherein the prepayment and foreclosure charges are considerably low.
That being taken care of, if and when you wish to use the HLBT facility, you can do so with minimal charges, thereby helping you save a significant chunk of money.
When you transfer your outstanding Home Loan to a new bank, you can enjoy numerous perks like lower interest rates, reduced EMIs, and favourable repayment terms. However, not many people know that your new bank may also prove you with a Top-Up Loan if you need one.
The Top-Up Loan can help you enjoy a convenient influx of additional funds, which can be used for varied purposes such as home improvements, purchase of appliances, sponsoring your child’s education, purchasing business-related assets, and more. Since a Top-Up Loan will also be offered at lower interest rates, you can enjoy greater savings.
If you’re open to the idea of choosing HLBT right from the start, you can keep looking for a beneficial scheme from different lenders, especially when they roll out festive offers. Once you find an offer that serves your purpose, you can conveniently transfer your loan and enjoy the perks that it entails.
Everything said and done, Home Loan Balance Transfer is a long winding process that requires the right amount of effort as well as documentation. Besides, your new lender will also levy a Home Loan Balance Transfer fee. Hence, you should only go for this decision, if the cost-benefit analysis is in your favour! And yes, HLBT is a facility best used only once during your repayment tenure. Using it every time you see a better offer can, in turn, prove to be adverse for both your finances as well as your Credit Score!
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