If you're unhappy with your Home Loan because it feels too pricey or the service isn't great, here's an easy fix: switch to another bank. They might have a better deal with lower payments. Imagine paying less each month and getting rid of the loan quicker. It's like giving your loan a makeover and making buying your dream house way cooler. Check it out – it's worth a shot!
Also Read: Five advantages of a Home Loan
Benefits of Home Loan Transfer:
1. Lower interest rate
The most apparent benefit of transferring your Home Loan balance is a lower interest rate from the new lender. This can significantly affect the total amount of interest you pay over the loan tenure. Use Axis Bank’s Home Loan Balance Transfer calculator to understand how much you could save on transferring your Home Loan to Axis Bank.
2. Lower EMI
A lower interest rate also means a lower EMI, which can ease your monthly cash flow and help you manage your finances better. You can use the extra money to invest in other avenues, pay off other debts, or meet your personal or family needs. Alternatively, you can also choose to keep your EMI the same and reduce your loan tenure, which will help you become debt-free sooner.
3. Better service
You may be dissatisfied with the customer care, the processing time, the transparency, or the flexibility of your current lender. By switching to a new lender, you can enjoy a smoother and hassle-free experience and access features like online account management, prepayment options, and top-up loans.
4. Top-up loan
A top-up loan is an additional loan that you can avail from the new lender, along with the balance transfer. This can help you meet any additional financial requirements that you may have, such as home renovation, education, and medical expenses. A top-up loan usually has a lower interest rate than a personal loan, and it can be repaid along with the Home Loan EMI.
5. No prepayment penalty
According to the RBI guidelines, banks and NBFCs cannot charge any prepayment penalty on floating-rate Home Loans. This means that you can transfer your Home Loan balance to another lender without paying any extra charges to your current lender. However, you may have to pay some processing fee.
6. No impact on credit score
Transferring your housing loan does not affect your creditworthiness as long as you maintain a good repayment history and do not default on your EMIs. In fact, a balance transfer can improve your credit score by reducing your debt burden and increasing your credit utilisation ratio. However, refrain from applying for multiple balance transfer offers simultaneously, as this can create various inquiries on your credit report and lower your score.
7. Flexible repayment options
Some lenders may offer flexible repayment options when you transfer your Home Loan balance. For example, you may choose a step-up or a step-down EMI plan, where your EMI increases or decreases over time, depending on your income and expenses. You may also choose a bullet payment option, where you pay a lump sum amount at regular intervals, along with the EMI.
Also read: What is an instant home loan top-up?
Conclusion
Switching your Home Loan to a new lender can be a wise move. It helps payments and interest, increases monthly payments, and provides better service. But think about the pros and cons, check what different lenders offer, and make sure you're eligible. Look at your credit score and how much you can repay before going for it. If you do it right, you will save money and make owning your dream home a reality.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
