Know How Home Loan Balance Transfers Can Save You Money

Buying a home is a big milestone, but managing home loan payments can sometimes feel like a heavy burden. Did you know there is a way to reduce the load and save money in the process? It is called a home loan balance transfer, and it is an easy way to lower your interest payments. Here’s everything you need to know about how this can save you money and give you some relief.

What is a home loan balance transfer?

A home loan balance transfer is when you move your outstanding loan amount from one lender to another. You typically do this to get better terms, such as a lower interest rate. By switching lenders, you could reduce your monthly EMIs and save money over the life of your loan.

The main benefits of a home loan balance transfer

1. Lower interest rates: The main reason for transferring your loan is to lower your interest rate. A small drop in the rate can save you money over time.

For example, if your current rate is 9.5% and you switch to 8.5%, you will save a lot. That 2% difference can lower your payments and total interest.

2. Lower monthly payments: A lower interest rate also means lower EMIs. For many, this is the most attractive feature of a balance transfer. When your monthly payments go down, your disposable income increases, allowing you to manage your budget more comfortably. Imagine having extra cash every month for other important expenses or investments.

Imagine paying Rs. 50,000 each month for your loan. After transferring your loan, your new EMI could be Rs. 45,000. That is Rs. 5,000 saved every month.

3. Better loan terms: When you transfer your home loan, you can renegotiate the terms. You can ask for a longer loan tenure if you want to reduce your EMI further, or you can shorten the tenure to pay off the loan quicker.

For example, if you originally took a home loan with a 20-year period, you can now reduce it to 15 years. This helps you pay off your loan quicker, saving even more on interest.

4. Debt consolidation: Some lenders allow you to combine other debts, like personal loans, into your home loan. This way, you only have one EMI to manage each month.

How much can you really save?

The amount of money you can save through a balance transfer depends on a few factors:

1. Interest rate difference: The bigger the gap between your current rate and the new rate, the more you will save.

2. Loan tenure: If you are early into your loan tenure, a balance transfer can save you a lot. However, if you are near the end of your loan, the savings might be smaller.

3. Loan balance: The larger your remaining loan, the more money you will save.

Let us say you have Rs. 50 lakh left on your loan at 9.50% for 15 years. Your EMI would be around Rs. 52,000. By transferring to a lender offering 8.50%, your EMI would drop to Rs. 49,000. That is Rs. 3,000 saved each month and ₹36,000 saved each year.

Pro tip: To calculate your exact savings, you can use a home loan EMI calculator, which helps you understand how much you will pay monthly based on the new interest rate and tenure.

Is a balance transfer right for you?

Before deciding on a balance transfer, consider the following:

1. Processing fees: When you transfer your loan, the new lender may charge processing fees. Some may offer low or no fees to attract customers. Compare these fees to your expected savings.

2. Time left on loan: If you are closer to the end of your loan tenure, the savings from a balance transfer might not be much. Most of the interest is paid in the earlier years of the loan, so if you are nearly done, you might not save as much.

3. Prepayment charges: Some loans come with prepayment penalties if you pay off the loan early or transfer it. Check with your current lender to make sure there are not any large fees for closing the loan early.

4. Credit score: A good credit score can help you get better rates from new lenders. If your score is low, work on improving it before applying for a transfer.

Home loan balance transfer with Bajaj Housing Finance

Transferring your home loan to Bajaj Housing Finance can lead to big savings and better financial freedom. With low interest rates and an easy and quick process, Bajaj Finance ensures you get the most out of your investment. Whether you want to lower your EMI or reduce the tenure, a balance transfer can be the perfect solution.

Here are a few benefits of applying for a home loan balance transfer with us:

1. Top-up loan: Transfer your current home loan to us and access a top-up loan of Rs. 1 crore* or higher.

2. Competitive interest rates: Refinance your home loan with our interest rates starting at 8.30%* p.a..

3. Convenient tenure options: Repay your top-up loan over a long period of up to 30 years, making it easier to manage your finances.

4. Foreclosure options: Borrowers with floating interest rates can make partial prepayments or foreclose the entire loan without any additional fees.

5. Minimal documentation: We streamline the balance transfer process by keeping documentation requirements to a minimum for a hassle-free experience.

How to apply for a home loan balance transfer

Ready to save? Here is how you can apply for a home loan balance transfer with us:

1. Click the 'APPLY' button on this page.

2. Provide your full name, mobile number, and employment type.

3. Choose the type of loan you want to apply for.

4. Generate and submit your OTP to verify your phone number.

5. After OTP verification, fill in additional details such as your monthly income, desired loan amount, and whether you have identified a property.

6. Next, enter your date of birth, PAN number, and other requested details based on your occupation type.

7. Click the ‘SUBMIT’ button.

That is it! Your application is submitted. A representative will reach out to guide you through the next steps.

Take control of your home loan today and enjoy better savings with Bajaj Housing Finance Home Loan.