Home loan transfer: With Reserve Bank of India (RBI) lending rates at an all-time low, various public and private banks are offering home loans as low as 6.7%. Many of these banks offer these low interest rates not only on new loans but also on balance transfers.
So if you have a home loan and want to reduce EMI payments, you can consider the “Balance Transfer” option. < Simply put, the Balance Transfer Facility allows you to transfer your existing home loan from one lender to another lender.
Home loan interest rates vary from lender to lender. And with changes in RBI’s repo and reverse repo rates, home loan interest rates keep changing.
Undoubtedly, you need to check with different banks / lenders before shortlisting the current home loan lender to take. It should be noted, however, that as market conditions change, some other lenders must have started offering home loans at a very competitive rate.
If you are transferring the loan from an existing lender to a new lender who offers a low interest rate , you pay less than EMI.
Undoubtedly, the low interest rate is the main reason borrowers choose to transfer funds. A diligent borrower will need to evaluate other costs incurred such as penalties to be paid during the foreclosure of the existing credit account and processing fees to be paid to new lenders, etc.
According to experts, transferring the balance is not profitable, as you near the end of your home loan as the transfer costs offset the low EMI payments.
In addition to reduced EMIs, other options such as partial payment, top-up loan, foreclosure with no penalties, etc. can be checked when choosing the new lender. </ Before you decide to transfer the balance, you can negotiate the terms of the loan with the existing lender. When you find a lender that offers the transfer option at a reduced interest rate, you should evaluate the transfer costs and make the decision accordingly.
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