The process of balance transfer of home loans has become convenient ever since the RBI removed the foreclosure penalty. As per RBI guidelines, banks or lending institutions cannot levy any penalty for foreclosure or premature repayment of home loan. Earlier, customers used to avoid early loan repayments due to the high penalty levied on early repayment of loan. But, ever since the RBI issued the guidelines, customers are now taking advantage of the lower interest rates offered by other banks or institutions by opting for their home loan balance transfer. One of the biggest reasons why customers opt for home loan balance transfer is the low interest rate. It is a better option to make home loan affordable.
attention should be paid to these things
interest rate should be low
Everyone opts for home loan balance transfer only when the interest rate is lower than the prevailing rate of interest. If the interest rate on your existing home loan is high, then you must consider a home loan transfer.
The interest rates offered on the loan depend on the credit profile and other qualifications of the borrower. If the customer has a good credit rating, the bank or lending institution can offer him attractive interest rates. If this happens, you will pay less EMI on the remaining loan.
Home Loan Repayment Timings
You must always consider your income, financial obligations, interest rates and other factors while deciding your home loan repayment schedule. You will have to visit the offices of the banks to get the home loan balance transfer done. Balance transfer helps in shifting to better loan tenure.