In a hyper-competitive home loan market, borrowers are spoilt for choice. Lenders have come up with various offers to lure the customers in availing of balance transfer loans from them. Given the sheer choices one has, you need to be able to examine the options such that you end up opting for the right loan from the right lender and don’t have to keep transferring loans in the future too.
To do so, there are certain vital things that you need to consider before transferring the home loan. The biggest consideration typically one looks at is the lower interest rate. This is an important consideration but not the only consideration. There are other factors also to consider before you make your decision, and the same listed below:
Make Sure You Have a Longer Tenure Left: If you find a lender offering you a lower interest rate, it makes sense to switch only if you have a long repayment tenure left. Only then would you be able to make significant savings on the interest outgo. If you have only two to three years left, then it makes little sense to transfer to a new lender as you may need to bear processing fees and other miscellaneous charges.
Note that the interest component in EMIs is higher during the loan tenure’s formative years, and they gradually come down as you close in on the loan term. So, if you have a repayment tenure of 8 to 10 years, it’s prudent to switch to a lender offering lower interest rates. The savings, though, will depend on the outstanding loan amount and the difference in interest rates.
Ensure You Have Not Defaulted on EMIs: This is another essential consideration. If you have defaulted on your EMIs with your existing lender, it will reflect on your credit score and report. Note that your new lender will check these before approving your transfer request.
If your new lender will find irregularities in repayment, then he/she likely will reject your loan transfer request. The new lender will also check your loan account statement with your existing lender and decide whether to accept or decline your request. So, you must have a clean track record when it comes to paying EMIs.
Do Get All Property-specific Documents in One Place: Documentation plays a critical role in the loan application and transfer process. Before transferring, make sure you have all the documents, personal and property-related, in one place so that there are no roadblocks in the transfer process.
Additionally, you need to get in touch with your existing lender and get a written assurance that he/she will hand over all original property documents to the new lender within a specific period. Your new lender will need these documents, and so you must get them on time.
At the same time, consider the charges that you might need to pay, including processing fees, application fees, and other administration costs. Make sure that they are reasonable and don’t pinch your pocket hard.
Collect Information About the Lender: Research well about your new lender. Go through online reviews and testimonials to know about the quality of services.
Needless to say, you must opt for a lender who gives you the highest quality of service, addresses your concerns, and is ready to help you out in case of any untoward situation. It’s not only the lower interest rate on the offering but also the quality of services that matters.
Read the Fine Print Carefully: Before you go ahead with the loan transfer process, make sure to read the fine print carefully. In a nutshell, you must understand the terms and conditions to find out if there are any hidden charges or not.
You will get more information on the levied penalties if you default or foreclose a loan before the tenure here. So, read every sentence carefully and sign only when you are satisfied and understand them thoroughly. Reading the terms and conditions can help avoid nasty shocks later.
Summing it Up: Home loan transfer is a great way to bring down interest outgo and channelise the same in other investment avenues to enhance your riches. If you are serving a high-value loan, then it can result in massive savings in the long run. However, to gain from it, you must keep an eye on interest rates and make a move if you are in the early years of your high-tenured loan.
You can transfer your existing home loan to Poonawalla Housing Finance and gain from the competitive interest rates on offer and other befits that come along. To transfer your loan, write to us at email@example.com or call our representatives at 1800-266-3204 for further assistance.