Another advantage of this guideline is that it gives borrowers some degree of advantage in terms of controlling their interest rates. How? Before the guideline took effect, the hefty charges associated with foreclosures prevented someone from prepaying the loan, even when they had extra funds. Moreover, your home loan interest rate may remain high even in favorable market scenario as the lender may not transfer the rate benefit to you.
Given that there are no foreclosure charges for individual borrowers with a floating interest rate home loan, one can choose to transfer their remaining loan amount to another lender for better home loan terms. Thus, giving you the power to take advantage of the best terms at any time.
1. Choose Home Loan Balance Transfer for More Competitive Interest Rate
The most important reason why most borrowers use a . take advantage of
home loan balance transfer
Has a low interest rate. Of course, the interest rate offered to you still depends on your profile and eligibility, but one gets the chance to take advantage of the lower interest rate, thereby saving a lot on their interest outflow during their tenure.
If your credit and financial profile has improved, you may now be able to take advantage of a lower interest rate. Your credit score plays an important role in determining your interest rate, and if you have been able to raise your CIBIL score above 750, you may be offered a lower interest rate.
2. Select Home Loan Balance Transfer to change other loan terms
While availing home loan balance transfer, you also have the option to revisit your loan terms. Many first-time home loan borrowers may not fully understand the terms and conditions of their loan. Over time, you may want to change some of your borrowing terms.
3. Select Home Loan Balance Transfer to change your tenure
When you refinance your home loan, i.e., opt for home loan balance transfer, you have a chance to renegotiate the terms of your home loan. One of the aspects you can reevaluate is your
home loan tenure
,
While you can take a calculated decision and choose a tenor based on your income, liabilities and disposable income, it is possible that once these parameters change over time, your home loan needs may change. Tenure and EMI may no longer work for you.
For example, your income may increase significantly, and you now want to pay off the loan quickly and be debt free soon. Alternatively, your liabilities may increase, and you may now prefer to bear lower EMIs with longer repayment tenure. Either way, you have the option of making the repayment more comfortable while negotiating your loan terms.
For example, you may want to change the benchmark to which your interest rate is linked, i.e. from an external benchmark linked home loan to the lender’s internal benchmark linked home loan. While banks only offer external benchmark linked loans, most HFCs also offer internal benchmark linked loans. When selecting a lender, you may want to keep this in mind.
Bajaj Housing Finance Limited, a 100% subsidiary of Bajaj Finance Limited, is one of the first HFCs to offer borrowers the option of opting for an internal benchmark linked home loan or an external benchmark linked home loan, i.e. home loan linked option.
repo rate
, For salaried and professional applicants, the lender offers competitive interest rates, starting at 7.20%* p.a. Those with existing home loans can transfer the balance on their loan to the lender for a minimum interest rate of 7.35%* p.a. for salaried and professional applicants.
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