A home loan balance transfer allows borrowers to switch lenders. The process involves transferring the outstanding loan balance from the existing lender to a new one. Here are a few advantages why most borrowers opt for a housing loan balance transfer.

  • Lower interest rates
A key reason as to why borrowers apply for a loan switchover is to avail lower interest rates offered by other lenders. Provided that floating rates are always changing, borrowers are advised to compare multiple options before choosing one that suits their requirements.

  • Reducing tenor
While opting for a balance transfer, borrowers can also opt for reduced tenors. Although it increases the EMI payments, it can help them to save on total payable interest.

  • Top-up loan
Individuals making a balance transfer are eligible to avail a top-up loan. It is an additional credit over the existing home loan and has no end-use restriction. Top-up loans usually have lower interest that personal loans and require zero documentation as the borrower has already availed a home loan. Some of the leading HFCs offer up to Rs.50 lakh with top-up loans.

Home loan balance transfers can be considered as a critical facility offered by various financial institutions. It is advised that even after availing an online home loan, borrowers should keep track of changing interest rates offered by other lenders.