Usually, you take the decision to purchase a home or go for a home construction post thoughtful consideration. This is because a massive sum of money goes into it during different processing stages. Most of you fund this investment by opting for a home loan with a long repayment tenure and high principal constituent. Note that the offered home loan interest rate is a matter of huge consequence to you as a borrower because even a little fluctuation in rate can impact your monthly outflow considerably. In case you find that your existing home loan is not providing you the best rate, especially when compared to other home loan lenders in the market, you must not stick with your existing loan provider.
Instead, you must opt for home loan balance transfer option. This option allows you to switch your existing home loan to another lender to avail lower rates at better terms. This permits you to make a tactical and effective use of the existing home loan rates that are currently being offered by distinct lenders across India. However, before you opt for this option, you must use a home loan refinance calculator to compute the overall savings on interest constituent if you go for the transfer facility. If your savings are substantial, you must opt for this option.
Cost benefit analysis
Even though the home loan balance transfer facility might be lucrative, conducting a cost benefit analysis before your final decision is a must. In the home loan transfer calculator, there are certain parameters asked, namely, principal outstanding amount of your ongoing home loan, loan tenure of your existing home loan, existing home loan rate, serviceable tenure on your new loan, offered rate on your new loan etc. Once you fill up all these details, your overall savings on transfer option shows up immediately. In case your savings on transfer is substantially high, you must opt for the balance transfer facility. Make sure to also factor in the service fees and charges while computing your overall savings on the balance transfer facility. This is because few lenders might enhance the service fees on the transfer option to compensate for the lower home loan balance transfer interest rate.
Also, note that the reason to opt for balance transfer is usually not limited to better home loan rates. Many may opt for the balance transfer option to avail better services, top up on existing loan amount, higher/lower repayment tenure etc.
A home loan balance transfer calculator is the perfect instrument that can help you to make the right decision. The calculator factors in your existing home loan details like outstanding loan amount, interest rate, loan tenure etc. Based on the added details on the home loan take over calculator, you can compute your entire savings instantly for an informed decision.