Looking to transfer your home loan for lower EMIs? While that is a great decision for your pocket, transferring at the wrong time will burn a deeper hole. For such an important step, you must consider the several factors that aid in transferring when the time is right. As experts say, there’s more to choosing the right time than just the lower interest rates.
Housing loans usually has an average duration of 15 to 20 years. During this period, you must carefully monitor the loan account to look for better interest rates, but not necessarily in the same bank, you’re in. Today, you can switch to other banks that offer better home loan EMI, processing fees, and interest rates. However, to not incur any loss, you must transfer when the time is right. Here are some things you should keep in mind for that to happen: –
Choosing the right time during the tenure
When the loan tenure begins, the principle comprises of the lower interest, whereas the EMI has the higher one. However, the principle moves higher with time while the interest falls, and if you wish to reduce the EMI, transferring in the loan’s initial days can help you save more. Moreover, if you choose to transfer during the loan’s end, the transfer costs will outweigh most of the savings through the new lender. Hence, choosing the right point of tenure is essential.
Lowered interest rates
The RBI (Reserve Bank of India) regulates the bank rate and CRR quite frequently. Hence, any reduction in them can provide lower home loan interest rates. If you see a potential new lender offering decreased interest rates, then it could be a great chance to make the transfer. This will efficiently decrease your EMI troubles while also saving you quite the dough.
When the outstanding loan amount is higher
As your loan matures, the principal gets paid gradually, which decreases the outstanding loan amount. However, when the outstanding amount is a hefty one and a lender is offering you a better deal that will be the right time to transfer your loan.
The involved terms and costs
There is more to a home loan balance transfer than just doing it every time a rate cut pops up. The terms and costs of the transfer play an integral role as well, especially when deciding if your current lender is a good option. If you’re unhappy with the existing lender and can find friendlier terms along with lower transfer costs, switching the loan will be the right decision.
To conclude, your home loan balance transfer should be done when several factors come together to get the timing right, be it costs, interest rates, or reduced EMI. The process is tedious and requires patience, but if you plan right, it will be a breeze. Just make sure to consider renowned financial organizations to make this process easier. You will not just avail easy home loan options, but features such as their home loan EMI calculator, to help you make the right decision. With reliable lenders, you are also likely to enjoy a transparent and easy experience.
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