Your Handy Checklist to Approaching a Home Loan Balance Transfer
Often, a prospective lender may come across as reasonable and beneficial, only to cause problems later on. These could be in the form of high interest rates, bad customer service or even the existence of rigid anti-prepayment policies set by the lender.
However, it is important for you to not get overwhelmed by these disavowals and use a mediating path that offers more rewards than regrets.
This is where a home loan balance transfer comes into the picture. If you have the documents required for a home loan balance transfer and succeed in completing the application procedures, this process can be both hassle-free and rewarding.
Also Read : When should you do Home Loan Balance Transfer?
Factors to consider before opting for a home loan balance transfer:
- Evaluate Customer Service:
Customer service refers to the treatment the lender gives the borrower after the loan is sanctioned. Timely posting of the loan account statements and addressing borrower concerns and complaints form the essence of customer service. This can improve or deteriorate over time, depending upon how professional and ethical the lender is. If you are dissatisfied or inconvenienced with the services offered by your lender, you may consider going for a balance transfer. However, if the problem is high interest rate and not the service as such, it would be wise to stick to your original lender and negotiate a better interest rate.
- Ensure authenticity of interest rates:
Numerous lenders claim to offer low interest rates as part of a promotion or an advertising campaign. Once they have attracted enough customers, they hike their interest rates. Before you sign the contract, make sure you do your research and ascertain that the interest rate communicated to you is not a gimmick or part of a promotional campaign. Prevent yourself from being misled by advertisements.
- Read and understand the lender’s policies thoroughly:
Before applying for a home loan balance transfer read the policy thoroughly. Understand all the rewards, rules, incentives and regulations that you may be eligible for. This helps you better protect your interests and rights. Also, make sure you are well-versed with the prepayment policies of the new lender. While some lenders freely allow prepayment, others may charge prepayment penalties to protect their own interest.
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- Check for all charges and fees:
Loan schemes usually come with various home loan balance transfer charges. These may include the processing fee, application fee, franking fee and legal fee. Before you finalise the balance transfer, make sure you understand all the costs the new lender will charge. This will give you a clearer picture of whether the loan option has greater benefits or greater costs and eventually opt for the more rewarding scheme.
- Search for additional incentives:
Some lenders offer borrowers additional incentives to complete a balance transfer in the form of low interest rates, relaxed regulations for prepayment and even a home loan balance transfer with top-up These incentives can make life with the new lender much easier for you.
Also Read : How can you benefit from a Top-Up Loan?
Eligibility Checklist and Criteria
These are the common criteria for a home loan balance transfer:
- The applicant should fall in the age group of 21-60 years
- He/she should have a few months of receipts of EMI payments of the existing home loan
- The applicant should have employment proof along with a stable job for at least one year
- The borrower should be credit worthy and have a CIBIL score of 750 or above
If you consider these factors before seeking a balance transfer, you can gain the most from your decision. Bajaj Finserv offers low rates of interest on home loans with a top-up loan facility.