India’s home loan market is anticipated to swell at a CAGR of nearly 22% during 2021-26. The primary reasons behind this positive growth are lower interest rate, increased demand and rise in disposable income.
While prospective borrowers are taking full advantage of this favorable time, existing home loan borrowers can opt for a home loan balance transfer. It would allow them to service their primary home loan at a lower interest rate and improved terms of service.
To maximize the benefits, they can also take the aid of a home loan balance transfer calculator that most reputed lenders provide online. Using this tool, borrowers can check their savings on the transfer instantly along with other aspects.
However, first, they need to know the process of using this tool.
Using a home loan balance transfer calculator
Individuals who service home loans at a higher interest rate than the current market rate can opt for this loan transfer facility. Following is the step-by-step process to use a home loan balance transfer calculator for faster and error-free calculation.
- Visit the website of your preferred lender.
- Open the balance transfer calculator
- Enter the lender name of the existing home loan, property location, starting month and year of the loan.
- Choose sanctioned loan amount, loan tenure, existing loan interest rate and the new interest rate proposed to you.
- It will show the savings on home loan refinance eligible top-up loan amount and the sanctioned loan amount.
Some reputed HFCs offer this home loan balance transfer facility with minimal documentation. They also extend a top up loan of up to Rs.50 lakh that you can use for any purpose without any restriction on end-use.
Some HFCs also provide pre-approved offers that make the entire credit processing hassle-free and prompt. Such offers are available on a range of financial products like loans against property, home loans, etc. You can check your pre-approved offer by entering your name and contact number.
Before opting for this facility, individuals should also follow some useful tips to leverage maximum benefits.
Tips for a home loan balance transfer
Following are some of the factors that you need to know about home loan balance transfer.
- Consider credit score
Lenders generally offer a home loan with reduced interest rates to those with excellent repayment history and high credit score of 750 to 800. To improve the score, borrowers need to pay their current EMIs on time, clear credit card bills and adopt other healthy financial habits.
- Negotiate for better rates
Based on the eligibility, lenders allow individuals to negotiate for better interest rates to make the loan even more affordable. It also helps in lowering the EMIs and save on interest payment.
- Balance transfer charges
Typically, a home loan balance transfer entails processing fees and other additional charges. Thus, before opting for this option, you need to weigh if the cost is worth it or not. Along with that, you also need to know the documents required for a home loan balance transfer. It will save time later and expedite the transfer.
- Loans linked with an external benchmark
Borrowers servicing a home loan linked with repo rate should keep eyes on any repo rate cuts and such reductions. Since it is directly linked with the interest rate, individuals would be benefitted from such cuts by RBI.
Thus, along with using a home loan balance transfer calculator, borrowers can also use a pre-part payment calculator and foreclosure calculator as well to facilitate a smooth repayment.