If you have a home loan going on, you need to be aware of the fact that you can quickly transfer it to other lenders who offer better terms and conditions in the market. You are not bound to one organization; if you are unsatisfied with their service, you can easily switch. This process is called home loan transfer.
It is well-known that the loan owner is inclined towards more beneficial
terms and conditions. Therefore, to be happy with the terms and conditions of the loan is quite important, as the top reason people switch home loans is the interest rate.
What is a home loan?
A home loan is a credit facility offered by Banks and Non-Banking Financial Companies (NBFCs) to potential buyers of homes or land or those who are planning to construct or renovate their abode.
Every month the borrower pays a fraction of the principal amount along with the interest amount via an EMI (Equated Monthly Installments). Also, the borrower gains complete ownership of their purchased property after the loan tenure ends.
What is home loan transfer?
As the term suggests, it is the process of moving your current home loan from one lender to another for better terms and conditions. This process is usually initiated by individuals due to certain conditions like rising expenditures and inflation.
When an individual is burdened with a home loan, a high-interest rate directly impacts personal finances and budget, ultimately pushing them toward the transfer process. If one has a longer tenure left to repay the loan amount, this process makes sense.
What are its pros?
● Low-Interest Rate
The primary advantage of transferring a home loan is the ability to lower interest rates. So, if you currently have an interest rate that is higher, immediately transfer it to a lender with a lower rate. This’ll help you save a lot of money!
● Reduced EMI
Transferring your ongoing loan to a new lender can potentially lower your monthly EMI amount. This helps manage budgets and finances much more effectively and frees up funds for other expenses or investments.
● Improved terms and conditions
Undoubtedly, the process of home loan balance transfer helps you negotiate better loan terms and conditions. These include longer repayment tenure, reduced processing fees, and lower prepayment penalties.
● Better Customer Service
The most underrated reason for a loan transfer is unsatisfactory customer service. Therefore, if you are facing issues with your current lender, transferring your loan to a lender with better service can offer you a smoother loan experience.
● Debt Consolidation
This process can also be used as a way to consolidate multiple loans. If you have other high-interest debts, such as credit card debts or personal loans, you can consider transferring them into your home loan and take advantage as per its terms.
Earlier, once my housing loan eligibility was approved, I had availed home loan from ICICI, but due to their bad customer experience, I honestly had to switch. However, everyone suggested I go for Bajaj Finserv. The interest rate is also lower here, and the customer service is just unmatchable. I was able to complete the overall process by sitting in my comfort zone only.