The Facts About the Right Time to Shift Your Existing Home Loan
Home Loan may make it easier for you to buy that dream home, but paying them back may not be a cakewalk unless you plan ahead. That said, it’s important to have a basic idea of the various schemes at your disposal to choose the most suitable one to help you repay your debts. Among all the solutions, one of the most popular and effective ones is to transfer Home Loan balance.
But just turning to loan transfers won’t be enough, you also need to know the right time to shift your existing Home Loan. Here’s what you need to know about balance transfers and when to make that magical switch.
What is Balance Transfer?
A Home Loan balance transfer refers to the transfer of the money owed in one loan account to another with a different lender. Depending on your new lender, this could save you cash on interest payments or adjust the loan tenure, and hence help you pay off your debt conveniently. The new bank or credit card issuer may also offer incentives such as a low interest rate, an interest-free period, or part prepayment facility. Home Loan Balance Transfer offered by Bajaj Finserv gives you benefits like nil foreclosure charges and part prepayment facility. The process is extremely quick and hassle-free. Bajaj Finserv also offers 3 EMI free months on Home Loans to facilitate ease of repayment.
Documents Required for Home Loan Balance Transfer
Following are the documents you would need to submit along with the completed and signed bank’s application form for loan transfer:
- Proofs of both identity and residence, which include a voter identity card and a valid passport.
- Proof of income; for example, last 3 months’ salary slips or last 6 months’ bank statements showing salary credits.
- Miscellaneous documents including the employment contract. In case your current employment is less than 1 year old, the last 6 months’ bank statements showing repayment of any ongoing loans, a passport size photograph, and a cheque for processing fee favouring the new lender should be produced.
- Finally, documents for a Balance Transfer Home Loan will require a letter on the letter head of the existing lender stating the list of property documents held by them, latest outstanding balance letter from your existing financial institution on their letterhead, and photocopy of the property documents.
The Right Time to Transfer
To know the right time to shift your loan, you need to keep a check on Home Loan interest rates offered by different lenders. It’s an opportune time to shift if some other bank is offering lower Home Loan balance transfer interest rate. Before making the switch, compare the total loan expense between the two offers, appraising all the costs incurred.
Many existing borrowers switch their Home Loan to another lender in order to take advantage of the newly reduced interest rate and lower EMI. This is also called refinancing.
These EMI savings if utilised for other investments will earn additional returns. Borrowers can also maintain the same EMI with lower interest rate, thus reducing the tenure of the repayment.
Some banks allow borrowers to switch their loan within the same bank, but with a newly reduced interest rate. Therefore, while switching your loan, first consider converting the loan type with your existing lender, because there will be no documentation hassles involved in it. You can also apply online for your Home Loan transfer to enjoy easy and fast processing. Bajaj Finserv offers the facility to apply online for Home Loan at the lowest interest rate.