The suitable home loan rates in 2021, which are at their lowest in the last 15 years, indicate that the market is extremely favourable to invest in residential property. This rate eases out the EMI outgo, thus ensuring that the credits remain affordable. Existing home loan borrowers can also avail the benefits of lowered interest rates by opting for a home loan balance transfer.
This would help in finding a lending institution offering customised features and an affordable rate of interest. In this regard, a borrower must be aware of the additional charges levied on the loan balance transfer process.
Benefits of availing a home loan now
Lower interest rate and EMI
Since the interest rates are currently at their lowest, individuals opting for the advance now can enjoy a reduced cost of borrowing. With the RBI keeping its repo-rate fixed at 4%, borrowers can ascertain that they avail the best rates against their home loans and enjoy lowered monthly pay-outs.
Existing borrowers can also enjoy the advantage of lowered interest rates by opting for home loan refinance.
The primary reason to opt for a balance transfer is to lower the monthly payments. Since a home loan is a long term obligation, many existing home loan borrowers have to pay high EMIs and interest rate. Opting for a balance transfer would automatically reduce the financial burden and encourage healthy savings. It is suggested to opt for refinancing at the primary stage of loan tenor as the interest component is usually higher at the time.
For a streamlined process and evaluating the refinancing cost, one can use a home loan balance transfer calculator.
Improved provisions
Financial institutions follow a specified term and condition when approving a home loan. This includes the repayment structure and related expenses. With financial institutions trying to gain a foothold in the market after the slowdown in 2020, one can expect to enjoy customised features and added benefits on their home loans now.
Pre-approved offers
Lending institutions seasonally offer various discounts and schemes to grab borrowers’ attention.
For instance, pre-approved offers are available on selected financial products like home loans, loans against property, etc., to ease out the application process. Such benefits are a good reason to opt for a housing loan now. You can check your pre-approved offer by providing your name and contact number.
Top-up loans
By opting for a home loan balance transfer, apart from better repayment terms and a lower interest rate, housing loan borrowers can gain additional benefits. One can find a top-up loan that is an added fund over and above the sanctioned loan amount. These funds can be used for home reconstruction or making other big-ticket expenses.
These are some of the benefits individuals can gain by opting for a home loan now or by choosing to refinance the existing loan amount. Nonetheless, they must also be aware of the associated charges, such as prepayment or foreclosure charges.
Again, a home loan balance transfer is possible only if the borrower meets specific eligibility criteria. Typically, lending institutions evaluate an applicant’s credit score, income stability, repayment report, etc., before accepting the refinancing application.
An individual must negotiate with the existing lender regarding the interest rate before making a balance transfer or home loan application. Usually, lenders accept the demand for fear of losing a customer. However, if the situation seems unfavourable, then an individual can proceed with a balance transfer.
Apart from these points, one must know that lenders freeze the home loan account during the refinancing process. Hence, this option must be thoroughly evaluated and researched before proceeding.
