Out of the Rs. 22.5 Lakh Crore invested by financial institutions and NBFCs in line of credit across India till June of 2019, Rs. 11.8 Lakh Crore was in home loans. This vital data shows the innumerable number of Indians opting for home loans across the country, to either build their houses or renovate them. Consequently, with a rise in demand for financial products like home loans, financial institutions have come up with add-on benefits in the form of Housing loan balance transfer options. It ensures that customers can avail a competitive interest rate that lowers the total cost of credit.

A home loan balance transfer is one such offer by NBFCs that are designed to safeguard the financial interest of the client and hence save considerably. While such schemes offer numerous advantages, customers should not opt to transfer their loan account sans looking into its fine prints.

Borrowers with existing home loan accounts need to weigh the offered array of benefits and decide accordingly. Customers considering a home loan balance transfer should check out the following pointers and estimate how this transfer might affect their existing loan account.

• Rates of interest: This is the most crucial factor for customers before transferring their loan account. Of the numerous top tips to decrease home loan interest rates, the balance transfer option tops the list and is the most preferred. Typically home loans come with a high-value loan amount that offers extended tenors that range up to 20 years.

Subsequently, availing a housing loan balance transfer with reduced interest rates leads to lower EMI and consequently, in a slashed down the total cost of credit.

• Prepayment and foreclosure facilities: Prepayment allows borrowers to clear a substantial outstanding loan amount with a single payment. While generally, this is difficult for most customers, any customer who comes upon some extra amount can use this facility. Additionally, there is the added leverage of paying in a lump sum and hence lower interest as compared to EMI payments.

In case customers clear the outstanding credit amount at a single go, it is known as foreclosure. For borrowers looking for a housing loan balance transfer, it is ideally imperative that they look into the availability of this facility considering

• The impact that it has on their credit score, and
• The lowered interest amount that they would need to pay.
• Top-up loans: A few financial institutions and NBFCs offer account transfer followed by a top-up loan. Generally, this top-up amount can go up to Rs. 50 Lakh. It is especially beneficial in the case of borrowers of home loans who require further financial aid in the extension of their house, furnishing it, etc. Essentially, customers can fulfill all their urgent financial needs with a top-up loan. All that they need to do is look out for financial institutions that offer such additional loans against minimal documentation.
• Online account management: Online portals linked to the loan account are of immense convenience for customers. Firstly, it allows them to access all account details at their convenience. Additionally, online account management also enables customers to clear their EMI repayments via numerous online payment methods.

Once borrowers weigh out the effective reduction in expenses and other advantages, they can go on to apply for a home loan transfer. The online application process is reasonably convenient requiring

• Personal details
• Employment details
• Property details
• Documents
• Security fee.

For customers with existing housing loan accounts, it is vital that they compare different financial institutions and their offers before finalizing the transfer. While generally a reduction in the rate of interest is considered the highlighted benefit, customers must consider other benefits according to their customized financial requirements.