Are you facing the brunt of poor customer service and high interest rates? If that is the case, perhaps it is time for you to consider a home loan refinance. This move can help you enjoy the benefits of lower refinance interest rates and even better customer service from a new lender. Housing loan refinance involves changing over to a new lender with your existing loan.

Here are a few reasons why you should or could opt for it:

  • To Avoid High Interest Rates:

The interest rates vary from lender to lender; if a certain lender uses floating rates, interest rates tend to be controlled by the market and can soar incredibly high over a period. This could increase your EMIs and eat into your income. However, if you seek an immediate refinance loan from a new lender who offers low interest rates, you could end up saving a significantly large amount of money.

  • Poor Customer Service:

Good quality customer service has the capability to retain customers even in the most adverse situations. However, after acquiring a customer, certain lenders tend to become lax in delivering their services, which may create a stressful situation for the borrower. An instance of poor customer service is when the lender does not send loan statements on time or when the borrower has to deal with the lender’s incompetent and uncooperative staff. In such a case, seeking a refinance through a different lender who offers better service can work in your favour.

Also Read : Tips for Refinancing your Home Loan

  • Decline of Financial Status:

An individual’s financial status depends upon his/her income, investments and the ability to pay for expenses. This can rise or fall without prior warning. For example, if an investor loses money in equity, it could result in a decline in the overall financial status. Hence, in case your monthly income falls and you are unable to pay the same amount of EMIs, you might consider shifting to a new lender who charges lower interest rates.

  • Incentives with New Lenders:

Numerous lenders provide offers and incentives to borrowers seeking a refinance. These offers include the facility of top up loans with phenomenally low interest rates. Alternatively, a lender may also offer an incentive of having no form of penalty or fee over part-prepayment. While top up loans offers affordable financing over a long tenor and prepayment helps in reducing the principal and thus lowering EMIs, these offers are attractive when it comes to making the decision to do a home loan balance transfer.

  • To Change From Floating to Fixed Interest Rates:

Floating rates can fluctuate over time. Since these rates are completely market driven, they tend to rise or fall unpredictably. In fixed interest rates on the other hand, the rates are controlled and set based on MCLR or base rate systems. This ensures that they don’t rise beyond a certain point. Hence, if the existing lender has floating rate systems, a borrower may refinance with a new lender who uses fixed interest rates, at least for a particular duration.

Also Read : Floating Interest Rates vs Fixed Interest Rates: Which of These is Better for You?

These are some reasons why you should or may seek a home loan refinance. If you are looking for home loans with nominal interest rates and a top-up loan facility to meet your financial needs, consider a quick and rewarding balance transfer with Bajaj Finserv.

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