For many, owning a home is a cherished aspiration, and a home loan frequently transforms this aspiration into a tangible reality.
Whether you’re in the process of buying your first home by availing a loan from a home credit instant loan app or seeking methods to enhance the manageability of your existing home loan, the realm of home loans and their potential transfer holds paramount significance.
A home loan is the money an individual borrows from any financial institution to buy residential or commercial property. The individual returns the loan amount to the lender via Equated Monthly Installments(EMI) at a particular home loan interest rate.
It is a secured loan as the property bought is kept as collateral where the title is returned in the borrower’s name once the amount has been paid back.
A home loan transfer is an option available with almost every lender, allowing the borrower to transfer their loan amount from one lender to another, also known as refinancing. Its most important advantage is the power of negotiation that a borrower can hold with its current lender.
The availability of such a provision enables you to get a relatively better deal, with or without the same lender. It helps adjust your loan term and even get better interest rates.
The main reason for transferring a loan is the preferable interest rates that you get elsewhere. If interest rates are lower than when you first took the loan, a home loan transfer could help you get a low interest rate.
You can transfer the balance if you want a renewed tenure. For example, if you wish to change your tenure from 20 to 12 years, you can go for a balance transfer.
You can change your lender as and when you require by way of a home loan transfer if you get a reasonable and sustainable deal elsewhere. If you are unsatisfied with your current lender, choose a relatively more preferable one and switch.
Home loan transfer can also consolidate debts like credit card debt and help you bring all expenses under one hood. This lowers the overall interest rates and increases the benefits to the borrower.
You can opt for a top-up loan when you change your lender, as the repayment tenures are long and flexible. These top-ups come with zero end-use restrictions.
Opting to transfer your home loan to a different lender might result in the new lender imposing processing fees, which are meant to account for the administrative tasks associated with the transfer.
Some banks implement a single charge, a processing fee, while others divide it into the processing fee and the administration fee. The processing fee is applied before the loan approval, whereas the administration fee is incurred after the loan has been sanctioned.
While the loan amount itself is exempt from this tax, GST applies to components such as the processing fee, administrative fee, and fees related to technical and legal assessments.
I took a home loan from the Bajaj Finserv app at my neighbor’s suggestion, who also availed the same facility. Apart from taking a fresh home loan, they also allow you to transfer the loan amount, giving competitive interest rates, small EMIs, and a flexible tenure.
A home loan transfer is not just a financial transaction; it’s a strategic maneuver with the potential for substantial advantages. Switching lenders during your home loan’s tenure opens doors for cost savings, a better home loan interest rate, and improved repayment terms.
A home loan transfer’s advantages reach beyond mere convenience, empowering homeowners to make informed financial decisions and optimize their investments, leading to a more secure and prosperous future.