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Balance Transfer – Best Way to Reduce Home Loan EMIs and Tenor

Things to Keep in Mind when You opt for a Home Loan Balance Transfer

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Home Loans
In this 21st century building a home is not everybody's piece of cake but there is always a way for a will hence home loans provide you the way to own a house. Pixabay

A home loan is a long-term financial obligation that requires you to be consistent with your repayment. Your EMIs are based on the interest rate and type of home loan you’ve opted for apart from the total loan amount. You should know that while home loan interest rates change every now and then, it is your responsibility to figure out whether you’re getting the best value for your money. If you aren’t, it might be time to refinance your loan. You can do this by opting for the home loan balance transfer feature with another lender that offers a better, more suitable interest rate.

To better understand why a home loan transfer is the best at reducing home loan payments, look at its advantages below.

You can Reduce your EMIs

While you may have used a home loan EMI calculator before availing your home loan, the continuous EMI payments may start weighing down on your pocket as you age. This is especially hassling when you are aware of other lenders offering better interest rates. A balance transfer to one such lender helps you enjoy a lower interest rate that is charged on your principal amount which automatically results in lower EMIs. Not only is this easier on your pocket, it also helps you save on interest expenses significantly.

You can Reduce your Tenor

When the interest rate on your principal amount drops giving you lower or cheaper EMIs, you may be able to choose a shorter tenor. In this case, you can choose to pay EMIs of the same amount as you were paying earlier, but with a shorter tenor, or you can choose to increase your EMIs by an amount that you can afford. With a shorter tenor, you are free from debt faster and your total interest reduces.

Things to Keep in Mind when You opt for a Home Loan Balance Transfer

Tenor of your Current Home Loan

Before you think of refinancing your housing loan, consider the current stage of your repayment. Generally, it is advisable to opt for a balance transfer during the first half of your repayment simply because the interest component on your EMIs is larger than the principal component during this time. This means that transferring early, and at a better interest rate, could help you reduce your total interest.

For instance, say you have a house loan of Rs.60 lakh for 240 months at an interest rate of 11% taken in the year 2001. Say you have already paid off EMIs for the first 100 months and plan to refinance the loan in 2019, when you have 140 months left on your tenor at the new rate of 8.85%. Your total savings in this case will be Rs.10.34 lakh.

Top-up Loan Feature

When you refinance your home loan, lenders typically offer you a top up loan. This loan is in addition to your housing loan and the amount you’re offered depends on your housing loan repayment history. Some lenders have the amount capped, for instance, Bajaj Finserv offers a top-up loan up to Rs.50 lakh. This loan has no spending constraints and can be used to meet any financial goal.

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The Cost Analysis of Availing the Home Loan Balance Transfer

In an attempt to save money, always consider the cost of refinancing your home loan. While it may offer great benefits, you’re required to pay fees to both, your current lender and new lender in the process. Factor all of these costs in and gauge whether or not this switch is actually going to save you money.

Always bag opportunities that ease your financial obligation, but do so only after thorough research. When you opt for the Bajaj Finserv Home Loan Balance Transfer, not only do you stand a chance to get a more affordable deal, but you also enjoy the luxury of transparency. This means that there are no hidden charges that can stress your finances. Additionally, if you opt for a floating interest rate housing loan when carrying out a balance transfer, you enjoy zero part-prepayment and foreclosure charges. To avail of this feature and all its benefits, check your pre-approved offer to get access to an easy home loan refinancing option.

Next Story

HDFC Now Offers Debit Card EMIs

There is no money that will be blocked in your HDFC account

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HDFC, Debit Card, EMIs
You can pay off this overdraft through EMIs, thereby, reducing the strain on your savings.

HDFC Bank is one of the leading private banks in India. With a total balance sheet of Rs. 8,95,653 crores and deposits worth Rs 6,71, 276 crores HDFC is India’s most valuable lender. The bank has always designed new and innovative ways to make their customer experience more enjoyable. Now you can convert large payments made on your HDFC Bank Debit Cards to Debit Card EMIs.

Debit Card EMIs allow you to pay for large purchases over a period of time. When you make a purchase using HDFC’s Debit Card EMI facility, HDFC pays the entire amount of your purchase to the vendor and opens an overdraft against your HDFC account. You can pay off this overdraft through EMIs, thereby, reducing the strain on your savings.

Advantages of HDFC Debit Card EMIs

No Money Blocked

HDFC, Debit Card, EMIs
Debit Card EMIs allow you to pay for large purchases over a period of time. Wikimedia Commons

There is no money that will be blocked in your HDFC account. Every month you will just need to pay the EMI amount.

No-Cost EMI

A no-cost EMI carries no additional costs, as the name suggests, this means that you will not need to pay any interest or additional charges of fees for using this facility. This facility by HDFC is available on Flipkart and Amazon on select Debit Cards.

Flexible Repayment Options

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There are a number of EMI tenures to choose from when using HDFC’s Debit Card EMI facility. You can choose between tenures of 3, 6, 9, 12, 18, and 24 months, depending on your convenience.

Instant Approval and Disbursal

HDFC Debit Card EMI can be availed online in no time. HDFC provides pre-approved EMI facilities to its preferred customers and the disbursal of the amount to the vendor happens within seconds. This gives you no lag when you make a purchase through the Debit Card EMI facility.

No Documentation

HDFC, Debit Card, EMIs
When you make a purchase using HDFC’s Debit Card EMI facility, HDFC pays the entire amount of your purchase to the vendor and opens an overdraft against your HDFC account. Wikimedia Commons

HDFC Debit Card EMIs require no documentation. As this facility is attached to your bank account and you are technically repaying the bank and not the vendor, there is no documentation required to avail this facility.

No Down Payment

When opting for HDFC’s Debit Card EMI facility you can convert the entire amount to EMI. You do not need to pay a downpayment or anything to avail this facility.

Eligibility

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Eligibility for HDFC Debit Card EMIs is left to the discretion of HDFC. HDFC determines a cardholder’s eligibility based on their transaction history, duration of holding the account, account statements, relationship with the bank, credit score, etc. If you are eligible for HDFC Debit Card EMIs you will be intimated by HDFC or it will show up as a payment option when you are making a purchase online.