A home loan balance transfer allows you to shift from your existing lender to a new lender offering advances at a lower-interest rate. With a home loan balance transfer, you can also enjoy top-up loan facilities to increase your loan amount.
Given below are some points to keep in mind before you opt for a home loan balance transfer.
  1. Check the Interest Rate
When you transfer your outstanding balance to a new lender, consider checking the interest rate at which advances are being offered. Do make sure to select a lender with minimum interest rates to make your EMIs affordable. Also, check the MCLR before making a switch as the interest rate will depend on the on-going MCLR.
  1. Consider the Amount of Principal Left to Repay
While you opt to switch your home loan balance to another lender, consider transferring during the initial stages of the tenor. Your EMIs contains two components - the principal amount and an interest amount. At the initial stages of your EMIs, the interest part is comparatively higher than the principal part. Opting for a balance transfer at this stage will make you repay a large amount of the principal all over again.
  1. Check the Fees
Home loan balance transfer will also have several expenses such as processing fee, transferring fee, etc. Make sure to inquire about such expenses and opt for a lender with minimal fees.
In addition to the above, read the terms and conditions of your lender before you opt for a home loan balance transfer. Also, do study the takeover process to ensure a smooth transfer.