Home loan interest rates underwent significant changes in 2020, owing to the overall economic condition in India. Thus, several existing borrowers may decide to shift their lenders to avail the favourable terms. Nevertheless, blindly opting for such a shift can lead to more harm than good.
The facility of closing your remaining housing loan with one lender and shifting the same to a different financier to avail favourable terms is widely known as home loan balance transfer.
This feature can help borrowers make lucrative savings and decrease the loan burden effectively. However, individuals must keep a tab on the total cash outflow and EMIs to secure funds on time. In this regard, a home loan transfer calculator can prove beneficial.
How to use a home loan transfer calculator?
Existing home loan borrowers can use this tool to analyse the current market rate and make an informed decision on refinancing.
Following is the step-by-step process to use a home loan balance transfer calculator –
- Visit the website of a lending institution.
- On the home page, select the balance transfer calculator
- Enter the existing lending institution, credit starting and ending month and property location.
- Underneath this section, drag the arrow to set loan tenor, interest rate and rate of interest.
- One can find the results like new loan eligible amount, top-up loan eligibility and the amount saved with the chosen lender.
This is an intelligent way of comparing and finding good lending institutions offering personalised benefits. One can find additional features like a top up loan, which provides up to Rs.50 lakh against minimal documentation. In this regard, using a top up loan calculator helps in streamlining the complete process.
These HFCs also provide pre-approved offers that make the entire credit processing hassle-free and prompt. Such offers are available on a range of financial products like loans against property, home loans, etc. Check your pre-approved offers by entering your name and contact number.
Even though the refinancing process seems lucrative, individuals must know the charges and factors levied on it. They must be equipped with details on everything one needs to know about home loan balance transfer.
Things to check before switching home loan lender
Here is a list of things to keep track of when you do a home loan balance transfer for a streamlined method and better savings.
- Choosing a reliable lender
Individuals seeking a reliable lender for a balance transfer must look through different options. This would help them in finding an affordable interest rate and better services. Since the financial market is competitive, lenders present exclusive deals to potential borrowers. However, one must check the authenticity of these claims. In this regard, using a home loan balance transfer calculator would indicate the amount that can be saved after switching the home loan to a preferred lender.
- Negotiate for affordable interest rate
Individuals should negotiate with existing lenders to settle a lower interest rate. A borrower possessing a 750+ CIBIL score and remarkable repayment history has better chances of negotiation. Maintaining a loyal association with a financial institution would be beneficial in this scenario.
One can also use the home loan EMI calculator before approaching a new or existing lender for assessment.
- Check the charges involved
Balance transfer levies certain charges like inspection charges, application fees, processing fees, administration cost, etc. It is therefore essential to evaluate whether the transfer charges are less than the interest amount.
These factors would aid a borrower in saving more with a balance transfer. However, they must read the terms and conditions thoroughly. Moreover, determine the cost levied and savings made by using a home loan balance transfer calculator.