Why Home Loan Balance Transfer is a better choice?
When you avail a home loan, it doesn’t only act as the primary financial support to buy your home. There are many benefits that can be availed by an home loan borrower. Home Loan is a very good example wherein you buy your preferred Dream Home or an investment property with minimum financial stress on your existing funds and pay up in easy installments across long tenures.
A Home loan is the best example of a good credit. The biggest advantage of a home loan is that you pay in installments and at the same time the capital appreciation gives an advantage of liquidating the same at an opportune time to recover the interest cost and have a bigger financial gain. This will enable you to grow financially in due course of time.
Home Loan Balance Transfer
A home loan balance transfer is a process which makes your outstanding home loan balance transfer to another financial institution. A balance transfer of a loan makes you continue the loan but with a new lender. Most of the times, a balance transfer of home can give you the benefit of low-interest rate.
Till the time you are a regular with your payments and have good credit history any of the lenders any be more than willing to take you onboard. Since all the banks have now linked the Rate of Interest to your CIBIL score,higher CIBIL means lower interest rates and you stand a better chance to negotiate the interest rates as well. Thus Home Loan Balance Transfer achieves 2 goals for you as a borrower-
01.) You have the advantage of lower interest rates immediately upon transfer of the loan so you don't loose precious months in getting similar rates from existing lender and don't end up paying higher rate of interest for longer period.
02.) You start paying either a lower EMI or have a reduced tenure for the loan and later since this is mostly on floating rate of interest whenever the rates start going up your loan will take more months to reach the higher interest levels since you are on a lower slab.
Thus a Balance Transfer is a very wise decision to take advantage of lower interest rate regime and end up paying less as a total cost of the loan in long term.