Home Loan interest rates are affected by the fluctuations in the market. If you’ve borrowed a Home Loan with a high rate of interest, and are financially strained, then it’s time to seek out funding alternatives. You can either go for a Home Loan Balance Transfer or a Personal Loan. However, if you already have a Personal Loan, it’s advisable that you take up a Top-up Loan after transferring your Home Loan. A Top-up Loan usually has a longer tenure and a low rate of interest and you can use the money availed from it to clear off any unsecured debts that you might have.
If you’re opting for a Home Loan Balance Transfer, your new lender will get the outstanding principal amount transferred from your existing lender to their institution. Some financial institutions like Bajaj Finserv offer a Top-up Loan along with a Home Loan Balance Transfer, offering you additional funds at a lower rate of interest.
How You Can Go Ahead with the Home Loan Balance Transfer Procedure
Find the Right Lender
Today, almost every financial institution offers a Home Loan Balance Transfer but they may not offer a Top-up Loan. You need to do a comparative study of the different Top-up Loan rates available in the market before zeroing in on one.
If you’ve been consistently paying your EMIs and have maintained a good credit score, then getting an approval for this loan will be easy.
Analyse Your Liability
You need to do a thorough cost-benefit analysis before you opt for a Home Loan Balance Transfer. If the difference between your existing Home Loan rate and the new one is marginal, then it might be wise to stick with your old lender. You also need to factor in additional expenses like processing fees and exit charges.
Get Your Credit Approved
You need to have a good credit score and a clean repayment history to be eligible for a Home Loan Balance Transfer. The higher the credit score, the better interest rates you can claim on your new loan. Remember, your new lender would re-evaluate your existing loan and check your employment status before sanctioning the loan amount. After an interval of about 3-4 weeks, you’d get a final quote on the rate of interest, tenure, and other features.
File for an NOC
Once you submit a letter to your current lender asking for a Home Loan Balance Transfer, you’d get a statement that would show the outstanding loan amount. When you submit this document to the new lender, they would sanction your loan balance to the previous lender and get an account closure letter. All the documents from your old lender will be submitted to the new one and your post-dated cheques/ECS would be cancelled.
Don’t hesitate to switch to another bank if you’re unsatisfied with your current lender’s services and products. If you do happen to opt for a new lender, you can go with financial institutions like Bajaj Finserv that offer low interest rates, nil foreclosure charges, and part prepayment facility.