Are you an existing Home Loan customer who is paying a higher Home Loan interest rate to a lender? You need not suffer anymore as you can go ahead and use the facility of a balance transfer loan to help you afford it and also trim your EMIs.
If you are not yet convinced whether a balance transfer loan prevails, this write-up will help you! Let’s get started!
What is a Home Loan Balance Transfer loan?
If you already have a Home Loan account and paying exorbitant EMIs on it, availing the facility of a Home Loan Balance Transfer can help you out! It not only lets you avail better customer support but even lower Home Loan interest rates, top-up loan and more.
Hence, you can switch your Home Loan account from one lender to another and avail an affordable rate of interest along reduce or trim your EMIs, helping you save money!
Here’s How EMIs may Trim after a Balance Transfer Loan!
Having a clear knowledge of how various factors contribute to change your EMI payments need to be considered to know if a Home Loan Balance Transfer is a good option! Let’s see some ways in which a balance transfer loan can help you trim your EMIs.
Because of a Lower Interest Rate
For availing a Home Loan or any loan, a customer needs to pay a fixed or variable interest rate to the lender. It is added to the principal and contributes to the figure which one needs to repay over a tenor. A higher interest rate is the reason why existing borrowers go for a balance transfer loan. Hence, when you do that, your EMI also changes and helps you save money!
A Change in the Tenor
Choosing the same tenor than before and if your interest rate is lower than before will help your EMIs to reduce. Also, choosing a smaller tenor with a lower interest rate means your EMIs should remain same, and you would pay off the loan faster.
Differences in the Interest Rate Scheme
When it comes to the interest rates, there are two types – fixed and floating or variable! Some lenders offer fixed while some provide floating Home Loan interest rate. If you are opting for a balance transfer loan and if your lender is offering a fixed rate, then your EMI will trim for sure! Hence, it will help you save some money as compared to your old lender.
Part-prepayment is nothing but paying a part of the principle before the end of an actual tenor. A part-prepayment could be an amount which is more than your regular EMIs. Hence, when you make part-prepayments, your loan principle also reduces and helps you trimming the EMIs.
Top Up Loan
Lenders also let you avail a Top Up Loan to add to your balance transfer to help complete your other needs. The tenor is longer, and the rate of interest is 1-2% than your Home Loan, making it easily affordable!
The Bottom Line
Now that you are aware of the ways a home balance transfer can reduce or trim your existing Home Loan EMIs, why don’t you go for it and save some money! All the best!