A home loan balance transfer lets individuals change their existing financial institution and migrate to another. Borrowers generally opt for this facility to secure an attractive interest rate offered by the new lender. However, they may have to deal with some difficulties during this process. By knowing these challenges, they can stay prepared and take necessary measures to tackle those hurdles.
Challenges in getting the home loan balance transfer
Following are some major challenges that individuals may encounter while applying for a home loan balance transfer:
- Delay from the previous lender
It is not profitable for a financial institution when its customers transfer their loan accounts. This is why it may delay catering to those requests. As a result, the previous lender may take longer to provide the required no-objection certificate and process other necessary papers. Nevertheless, such a thing may occur in rare instances.
- New processing fees
Individuals can save outgoing interest significantly by choosing a home loan balance transfer. However, to reap the benefit, they should not overlook the processing fees involved in this process. They should opt for this facility only after ensuring it will benefit them financially.
- Lengthy process
When individuals apply for this balance transfer, they need to provide all the necessary documents. Then, the new lender will scrutinise those papers to validate their requests. All these may consume much time and the overall process may get delayed. In this regard, individuals also need to know which documents they will require for a home loan balance transfer.
- Consent of co-applicant
In a joint home loan, the willing individual must take signatures of his/her co-borrower to migrate their existing loan account to the new financial institution. The co-applicant may contradict the decision.
Nevertheless, individuals can convey to co-applicants how much they can save by taking the facility to make them agree. They can use the home loan balance transfer calculator for this. It is an easy-to-use tool that helps borrowers understand the total outgoing interest they can save by changing their lending institutions.
Benefits of using a home loan balance transfer calculator
Besides knowing the amount individuals will save, they can reap the following benefits by using a home loan calculator:
- They can know what their probable EMI amount will be after the balance transfer.
- It can also give them an idea about the repayment tenor they can choose after switching the lender.
- Some financial institutions enable their customers to know the top-up amount they can get while choosing them as their new lenders.
How to use the home loan balance transfer calculator
Here is the stepwise process to use this tool:
Step 1: Access the calculator from the lending institution’s website
Step 2: Enter the required details, including total loan amount, existing tenor, present home loan interest rate, the rate offered by the new lender, etc.
After these, the calculator will display the total amount that can be saved. Alongside this, you also need to know when you should opt for a home loan balance transfer.
Nonetheless, several financial institutions also provide pre-approved loan offers to their customers on financial products like loans against property and housing loans. These are readily available credit offers are tailored for existing customers. They can quicken their loan application process by accepting this special deal. Customers only need to mention their names and contact details to check their pre-approved offers.
In conclusion, a home loan balance transfer facility can help existing borrowers get reduced interest rates and, thereby, reduce their borrowing costs. However, as mentioned above, they may face a few challenges while opting for this facility. They can streamline the process to some extent by preparing documents and getting co-borrowers’ consent beforehand.