Home loan balance transfer, also called refinancing a home loan, is a process where a housing loan is paid off with another loan. People generally transfer the balance of a loan in order to attain lower rates of interest. In case a bank or other financial institutions are unwilling to reduce the interest rates on a particular loan, it can always be refinanced with a help of another bank.
How to transfer a home Loan Balance
- Request your current lender for the documents required to refinance the loan.
- After the lender provides you with a consenting letter with the outstanding loan amount, these documents will have to be provided to the new lender you wish to refinance your loan with.
- The new lender will then transfer the outstanding amount to the old lender.
- The old loan account will now be closed, and all future payments will go towards the loan you have availed with the new lender.
- The old lender will then hand over all the property documents to the new lender, officially completing the refinancing process.
- Refinancing your loan may lower you Equated Monthly Instalments (EMI) in some cases.
- As mentioned earlier, the rate of interest payable towards the loan reduces.
- Transferring your home loan balance will increase your credit score as well.
- While refinancing your housing loan, you can negotiate for a shorter tenure with the new lender.
- Often times, while looking out for a new bank to refinance your loan, you can opt for a bank that provides better service than your existing bank.
- Refinancing your home loan in the age of technology has become hassle free. The documentation required is minimal and more often than not, it is a quick procedure.
Why and when must you avail the Home Loan Balance Transfer?
No comments:
Post a Comment