How Transfer Your Home Loan Balance Helps to Reduce Your EMI

Home loan balance transfer is the process of paying off one home loan by getting another loan at a cheaper interest rate. The primary motive to opt for a balance transfer is to save money on interest payments. If a new lender is offering you a lower interest rate, then you can save considerably on the interest payments and you can surely make a switch. However, a small difference in the interest rate is of no benefit as banks charge 1% processing fee in the case of loan transfer. If there is a significant difference then a switch is worth the effort and cost involved. Further, before applying for a home loan balance transfer, you are required to fulfil certain eligibility criteria such as the minimum age at the time of application must be 21 years or above and repayments have to be completed before the age of 70.

You should have been in employment/ business for at least 3 years of which current employment should account for at least 1 year. In addition, you must be running a home loan from another lender. Some lenders may require that you should have paid at least 6 to 12 EMI’s on existing loan before opting for balance transfer. However, at times, this condition may be waived off. There should not be any default in the payment of EMI on existing loans. So, before opting for a home loan balance transfer, make sure that you calculate interest savings. If there is a significant difference in the interest rates offered by the new lender then a switch is worth the effort and cost involved.

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