With home loan transfer, you can shift from your existing loan to a new lender offering lower interest rates. Before you opt for a balance transfer, there are certain aspects that you should keep in mind, such as:
  1. Time of transfer
You should opt for a balance transfer at the initial stages of your home loan repayment. Your EMIs are divided into two components – principal amount and interest rates. At the initial stages, the interest amount is higher than your principal amount. Hence, opting for a balance transfer at this time of your tenor will not serve you any good.
  1. Process
You should be aware of the home loan transfer process to avoid hassles at the time of application. Before you apply, you are required to submit a transfer request form to your existing lender. After you receive a NOC, you can apply for a loan under a new lender by submitting it. Your new lender will clear your outstanding dues from your old lender. After the home loan takeover is completed your old lender will hand over the property documents to your new lender.
  1. Total cost of a loan
Balance transfer tends to reduce the total cost of your credit by reducing the home loan rate of interest. However, you must check the interest rate along with other additional charges to calculate the same. Also, check if any hidden charges are to be applied that may increase the cost of your advances.
Additionally, consider a home loan balance transfer only after analysing the current MCLR depending on which the interest rates of home loans are fixed.