​Looking To Transfer Your Home Loan? Here Are Some Essential Factors You Must Consider.

In a market offering hyper-competitive offers on a home loan, you, as a borrower, may find it extremely confusing to opt for prudent options. There are many lenders like the PNB home loan, Bajaj Finserv home loan, Axis bank, HDFC bank, ICICI bank, IDBI bank, IDFC FIRST bank, etc., that has come up with distinct offers to attract customers. One such option is a home loan balance transfer. Given the choices you have, you require examining all the options in a manner that you can end up choosing the correct loan option from the correct lender and do not require transferring loans once again in the future. 

To do this, there is a specific crucial thing that you must consider before transferring your home loan. The biggest consideration generally you must look at is the availability of a lower rate of interest. This is a crucial consideration but definitely not the only factor. There are also other crucial factors even consider before you make the decision, and they are ​listed here – 

Check out the possibilities of the home loan balance transfer – 

Initially, before you begin looking for a lender to transfer your present home loan, you must carefully ensure to read the conditions offered by your present lender, as specific financial institutions mention a clause that restricts you ​from transferring your home loan amount to another bank lender. Thus, if your bank has this clause that does not allow you to do so, then you are just left with the choice to renegotiate your home loan rate of interest with your present lender. 

Negotiate for lower home loan rate of interest – 

The next important factor you must consider for the home loan transfer facility is negotiating for a lower rate of interest with your present lender. This can be done simply if you have a good past credit record and on-time credit repayments. You can definitely give it a try and negotiate because few of the financial lenders may agree to reduce your home loan rates as they may be concerned about losing a valuable customer like you. In case this turns out to be in your favour, then you can save a lot of time, effort, and money. Additionally, there will be zero requirements to run around for the new formalities as well as documentation processes. 

Checking out the market for an affordable rate of interest – 

If the above-listed option fails to work, it becomes extremely necessary for you to opt for the balance transfer option. To begin with, this procedure goes by checking out for a lower rate of interest offered by distinct lenders available in the financial market. This process can be performed by comparing different home loan offers on the online lending markets.

Collecting the info regarding the selected lender – 

After shortlisting a few lenders, the next factor of comparison amongst them must be the services and benefits offered by the balance transfer option. Additionally, it is advised to review the track record as well as the reviews of the selected lender before making the final decision. 

Ensure you have a higher repayment tenure left – 

In case you find a bank lender providing a lower rate of interest, it makes complete sense to shift just if you have a higher repayment tenure on your existing home loan left. Only then can you make considerable savings on the overall interest outgo. In case you just have 2 to 3 years remaining, then it makes no sense to opt for the transfer route to a new bank lender as you might require bearing processing charges and miscellaneous fees, which will unnecessarily increase your overall home loan cost. 

Remember that the interest constituent in EMIs is higher during the loan repayment tenure’s formative years. Gradually, they decrease as you come close to the end of the loan tenure. So, if you hold a repayment tenure of 9 to 10 years, it is prudent to shift to another lender providing you with a lower home loan rate of interest. Savings, though, will be based on the outstanding loan proceeds and the difference in the rate of interest.  

Make sure you have not defaulted on the loan EMIs – 

This is the next crucial consideration. If you have defaulted on your loan EMIs with your prevailing lender, it will show on your credit report and your score. Remember that your new bank lender will check these before giving you the approval for your transfer request. In case your new home loan lender finds out about any irregularities in the past repayment, then the lender may likely turn down your request for a loan transfer. Also, the new lender will check out your loan account statement with your prevailing lender and determine whether to decline or accept the transfer request. So, you should ensure to have a clean track record when it is linked with paying loan EMIs. 

Do get all the property-specific documents in a single place – 

Documentation plays a crucial role in the loan application as well as the transfer process. Before making the loan transfer, ensure you hold all the documents, personal as well as property-linked documents, in a single place so that you do not face any roadblocks in the home loan transfer procedure. Moreover, you require contacting your prevailing lender and get assurance in writing that the lender will hand over all the original property-linked documents to the lender to whom you are transferring the home loan within a particular time period. Your new bank lender will need all such documents and hence you must do your best to get all of them on time. 

Simultaneously, you must consider the fees that you may require paying, which include the processing charges, application charges and various other administrative fees. Ensure that all such fees and charges are reasonable and do not pinch your pocket. 

Collect the info about the new home loan lender – 

Ensure to research well regarding your new lender. Go through all the online testimonials and reviews to know about the services they offer. Needless to say, consider opting for the lender who endows you with the best quality of services, is ready to assist you in scenario of any serious scenario or addresses your concerns instantly. It is not just about the lower rate of interest on offer but even the service quality that matters the most Read more