Banks and financial institutions keep updating their terms of loan plans to cater to the needs of their customers. If you check the terms that used to exist a few years ago, you’ll notice how much things have changed. Loan plans nowadays are relatively a lot more practical than the older ones, and they will just get better with time.
It’s pretty normal to miss good deals when the options are too many, but that’s no reason to be upset. You can give the balance transfer home loan a fair shot once you find a plan better suited to your budget. A balance transfer home loan basically involves moving an outstanding loan balance from one lender to another.
In this article, we’ll be discussing all balance transfer home loans and the home loan advantages using house loan calculators.
Balance Transfer Home Loan: An Introduction
Balance transfer home loan allows borrowers to transfer their existing housing loan from their current lender to a new one. Also regarded as ‘Refinancing’, this step is undertaken by borrowers to get better loan terms and fixed interest rate home loan. This enables borrowers to save money and make the most of the best deals available in the market.
What Makes Balance Transfer Home Loans Beneficial?
A balance transfer home loan can be the ultimate game-changer if you meet a certain set of conditions. Experts recommend doing a cost-benefit analysis before making the move so that borrowers can margin money.
Here’s what makes balance transfer housing loans highly beneficial.
Lowers Your Rate of Interest and EMIs
The primary reason for borrowers to transfer is to obtain lower interest rates. This results in lower monthly EMIs for the loan, lowering the monthly burden.
Offers Better Repayment Terms
Terms and conditions disbursement of loan vary from lender to lender. A balance transfer is recommended if you find better deals from another lender that suit your financial goals.
Foreclosure and Prepayment Charges
Before making the move, foreclosure and prepayment charges are the two important things to consider. During cost-benefit analysis, ensure that these two charges don’t affect your financial goals. You wouldn’t want to end up paying more than you previously used to pay during the transfer. Only consider moving your balance amount if the plan helps you save money.
There are several direct and indirect benefits associated with balance transfer home loans. Apart from lower interest rates and EMIs, you also get loan top-ups from lenders in case you need more funds.
Perks of Using a House Loan Calculator
Opting for a balance transfer is helpful, but experts suggest calculating the risks before moving forward. The best way to understand the balance transfer’s suitability for you is to use a house loan calculator.
Here are the perks of using a house loan calculator before making the big move:
A House Loan Calculator Displays an Estimate of Savings that Can Be Made
Most borrowers who move their housing loans want to save money by lowering the total cost of their loans. This is a situation where a house loan calculator comes in handy. This calculator accurately displays the amount of savings one can make by going ahead with the transfer. So, if the results are not very impressive, the borrower can change their mind.
Using a Housing Loan Calculator is Simple
Manual estimation of a loan’s instalments per month can be time-consuming and error-prone. This can later cause issues with loan repayment and other problems. A housing loan calculator is a great pick for such calculations. All you need to do is enter the loan amount you’ve opted for, the rate of interest, and the repayment term. With this calculator, you can save time that goes into manual calculations, making decisions faster.
House Loan Calculator is Completely Free of Cost
Gone are the days when you were required to book appointments with agents to decide what best suits your requirements. You can just search for a house loan calculator online and use it for free any time you want.
Balance transfer home loans are a great way for borrowers to optimise their loans and save money in the process. However, cost-benefit analysis is a step that is often overlooked. This carelessness can cause borrowers to end up spending a fortune on their new lender. Make sure to plan strategically and only move your balance if it helps you save money in the long run.