Have you purchased your dream home? But what did it cost, years of savings and considerable debt, probably even at unfavorable terms?
But it doesn’t have to be that way. Suppose you have been paying your home loan installments for a few years and see that the market has changed, and you can find better and more favorable terms.
Take it, whether for the EMI loan tenure or interest rate. In that case, these are all preferable and can make your loan payback process much more manageable.
This all can be achieved through the process of home loan transfer, but what is it, why do you need to do it, and how can you do it? Keep reading to find out.
What is a home loan transfer?
A home loan transfer refers to a borrower shifting their existing loan to a different lender offering better terms. These terms might be due to the changes in the market, NBFCs providing better and more competitive options, or even a change in the applicant’s loan profile.
These changes are as per the housing loan eligibility. These criteria are listed below and can help you get preferable rates even if you plan on getting a home loan for the first time.
1. Debt-to-income ratio
Most lenders consider the debt-to-income ratio one of the most essential criteria when giving loans. Providing loans to people with low DTI is always preferable as it ensures the applicant has enough money to repay the loan.
2. Loan Tenure
To bring down the EMI, people often choose longer loan tenures, which is good in terms of making this purchase accessible. However, it is essential to remember that longer loan tenure can result in lesser EMI but a higher final interest payout.
3. EMI
According to the DTI, a loan might not be approved or have higher interest rates if the EMI crosses a certain percentage of the applicant’s monthly income.
4. Loan-to-value ratio
The loan-to-value ratio, or LTV, is another significant factor in most secured loans. Having a loan with higher LTV can result in higher interest rates.
5. Credit Score and History
Having a good credit score and history is essential in getting a loan in the first place and then getting preferable terms in the form of better interest rates.
Where to get a preferable home loan transfer interest rate?
A few years ago, I bought my dream home. I had lived in a two-bedroom apartment with my wife for several years, and we both decided to use our savings and get a loan to buy our dream house.
After months of searching, we landed on this beautiful, newly-built semi-furnished 4-bedroom apartment. We were in love, but it cost more than planned. But thinking of our future children and their upbringing, we caved in and purchased the house using a loan with a higher interest rate and EMI than we would have liked.
This caused considerable stress in our daily lives. Thankfully, my friend saw our situation and recommended us to Bajaj Finserv. We spoke with them, and they helped us transfer our home loan to incredibly favorable terms.
This massively reduced our monthly EMI and the interest rate, and we were finally able to relax and enjoy our new home, awaiting our little one to join us.
What is the home loan transfer process?
This is the process we followed to get started on the home loan transfer.
- Download the Bajaj Finserv application.
- Search for Home Loan Balance Transfer using the search bar on the home page.
- Once on that page, tap ‘apply now’ and enter some KYC details and all the requested information.
- Next, choose your current home loan lender from the drop-down and enter your monthly salary and required loan amount.
- Enter the other requested details in the next step and click the ‘submit’ button.
Conclusion
To conclude, unfavorable loan terms or the ability to get better terms are why people transfer their home loan balance. In my case, Bajaj Finserv came in and helped me reduce the stress and offered exceptional terms for my home loan transfer, allowing me to relax.
Whether you are reading this article to know why you should transfer the loan, what impacts interest rates for home loans, or whether you are looking to transfer your home loan balance, by following the above steps, you can go ahead and do so as well.