Have you purchased a home loan, which you are unsatisfied with now? Does your lender have penalties or high floating rates? If so, a home loan balance transfer is a solution you are likely to have looked at. A home loan balance transfer with top up is when a borrower changes his existing lender to receive lower interest rates and other incentives like a top up loan. This top up loan can be used for additional repairs and renovations of your home. However before jumping into a decision just because of the benefits, it is important for you to consider other factors like home loan balance transfer charges and even eligibility for home loan balance transfer. Considering these factors can ensure that you make a right decision.

4 things to consider before a transfer

Apart from interest rates and customer service, it is also important for you to evaluate other factors. These factors may include the charges, interest rate systems and even your income to savings ratio. Here are important things to consider before going for a balance transfer:

  1. Interest Basis points: Points can be defined as the differences in interest rates or the fraction by which they change. For some lenders these points are likely to be high, as interest rates fluctuate often. However, you should choose a lender with low interest rates. This will ensure that your monthly EMI will come down.
  2. Interest rate systems: Interest rate systems are the basis over which interest rates work. Some lenders use floating rates, while some use fixed rates. Floating rates are controlled solely by market forces and hence have a tendency to soar really high; whereas fixed rates have very few and marginal fluctuations. If you seek on saving income from low EMIs, you should opt for a lender with fixed interest rates. Fixed interests are safer and have no influences of market forces like demand.
  3. Home value: Home equity can be described as the overall monetary value of your home over time. The value of your home can rise or fall in the real estate. However, when you are opting for a home loan balance transfer, it is important for your home to have high value in monetary terms. This means that you would have to pay low EMIs. Also if your home equity is low at a certain period, it could become increasingly difficult for your balance transfer application to get selected. Hence, you should ensure that the move is timed correctly and made when your home equity is high.
  4. Costs versus benefits: Before going ahead with the application, it is extremely important for you to do a thorough analysis of all the costs and benefits associated with the move of balance transfer. There can be numerous costs like application cost, processing cost, taxes and even legal costs. When performing the move make sure that your savings break even with the costs of the move, or are higher. If your costs are much higher than the benefits and savings, it is likely that the move would not bring you much positive change.

Considering these four important factors can make sure that you make the correct move. So hurry up and avail a quick balance transfer here. Bajaj Finserv offers you extensive winning facilities like top up loan and low interest rates on your home loan transfer.