As per reports, the demand for housing loans had risen in the last quarter by up to 40%  across India. As an aspiring homeowner, you may have already signed up with a lender offering a competitive rate of interest. You may also consider the various home loan tax benefits that work to your advantage as a borrower. However, with the pandemic creating a strain over household incomes, making repayment more affordable is the most common reason to look for refinancing options with a home loan balance transfer.
During such times, when you already have a housing loan with a lender, refinancing your loan at a lower interest rate is the most cost-effective solution. Here’s a detailed guide of the many factors to consider for an easy home loan balance transfer for lowered monthly payments.
Check your eligibility for a transfer.
Most lenders consider a balance transfer to be a new home loan application. You will have to furnish all documents required for a home loan, such as address proof, identifications, and income and employment details, as well as property papers for verification. Your repayment history will also be scrutinized so that that lender can assess the risk you pose as a borrower. Your current repayment behavior will also be taken into account to ensure that you have paid your EMIs on time before you opt to switch your home to a new lender.
Pick an option that offers additional finance.
A top-up loan offers finance over and above the approved home loan amount to offer you additional funds based on your repayment profile. If you have paid the housing loan EMIs for the last one year  without delaying or defaulting, then you are usually eligible for a top-up loan. With its nominal interest rate and no limits on the use of the funds, a top-up provides an excellent source of finances for diverse requirements. This option is usually available to you when you carry out a home loan balance transfer.
Have a reliable credit score
Your credit score is essential as most lenders will check your repayment history to ascertain the risk they are taking on by offering you the chance to do a home loan balance transfer. So, review your score before you apply for this and ensure it is above 700 to be eligible as most lenders in the market.
Check the home loan balance transfer fees.
Remember, switching your home includes charges such as balance transfer processing charge, valuation charges, legal or technical fees, documentation charges, and more, depending on your existing and new lender. Take these into account as they add to your cost. Ensure that your savings are more than all these fees put together and only then transfer your housing loan.
Opt for the right time to switch your loan
If your housing loan is still in its early years, it is wise to switch lenders. This is because you will be repaying more of the interest during the first half of your tenor via your EMIs than the second half when you will be repaying more of the principal component. When you switch during the first half of repayment, you will be able to save more when you opt for a home loan balance transfer.
Select the most economical interest rate
Refinancing with lower interest rates is essential; however, you must also only consider a home loan balance transfer if your new lender’s rates are substantially below what you are currently paying. This will help you reduce your EMIs or your loan tenor and reap the benefits of switching your loan.
With this information in hand, you can now make the most beneficial and cost-effective decision about your home loan balance transfer. The Bajaj Housing Finance Limited Home Loan Balance Transfer, for instance, offers competitive rates when you meet the eligibility guidelines and submit the right set of documents required for a home loan balance transfer.
Here you can qualify for a high-value top-up loan to meet your diverse funding requirements too and repay it and your home loan comfortably with a tenor of up to 30 years. What’s more, you can continue to claim your home loan tax benefit and make planning this easier by using online tools such as a home loan tax benefit calculator. So, get started, refinance your loan with ease, apply online with a simple application.