When Should You Opt for a Home Loan Balance Transfer?

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09 JUNE, 2021

A home loan balance transfer facility allows you to transfer your outstanding home loan amount to another lender that offers a more attractive rate and favourable terms. This can help you reduce the home loan interest rate, thereby saving a significant amount of money in the long run. But, under what circumstances is the balance transfer facility a feasible option? Here’s the answer:

When to Opt for a Home Loan Balance Transfer?

It’s advisable to transfer your home loan to a different lender only if the outstanding loan tenure is reasonably long. By opting for a home loan balance transfer in the initial years of your home loan, you can benefit from the lower interest rate by the new lender for a longer duration. The lower your home loan interest rate, the lesser will be your monthly instalments. Thus, transferring your home loan early on in the tenure can reduce your overall repayment burden significantly.

On the other hand, if you have already completed a major portion of your loan tenure, opting for a home loan balance transfer might not be feasible. This is because while switching your lender, you will have to pay a balance transfer-processing fee and other associated charges. You must consider these charges and calculate the total amount you would save on the interest pay-out before opting for a home loan balance transfer.

If you wish to transfer your home loan to a different lender, make a note of the factors mentioned below:

Check the number of EMIs remaining and calculate the total interest you would be paying over the remaining loan tenure.
Check the prepayment related charges with your existing lender
By using a home loan balance transfer calculator, check the total amount you will save by switching your home loan to a different lender.

You can also make use of the balance transfer facility if your existing lender doesn’t provide quality service or is slow in transmitting changes in interest rates. A home loan balance transfer can also help you extend the repayment tenure of your home loan depending on your loan amount. This will make your EMIs more affordable and eliminate any chances of default.

At Kotak Mahindra Bank, we understand your home loan needs, and hence, you can easily pay your existing home loan balance at a lower rate of interest with our home loan balance transfer facility.

Simplified application process, paperless documentation, efficient customer service, and round-the-clock assistance are some of the major perks of availing a home loan with us. Furthermore, if you are already servicing a home loan, you can consider transferring your outstanding loan amount to Kotak Mahindra Bank at a comparatively lower rate. This will reduce your repayment burden and you will be able to repay your home loan in a hassle-free way. In case of any query, you can always reach out to us. We will be more than happy to assist you and resolve your concerns.

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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