Home Loan Balance Transfer – Hurdles and Procedures

If you have taken a home loan, and somehow you feel that it has become a burden to you, a home loan balance transfer is one of the best ways to get off with the burden. A home loan balance transfer means that you transfer the existing home loan amount to a new loan provider. When you transfer the home loan balance, you get a better rate of interest, new terms and conditions, and a better loan tenure so that the monthly installment is low and you do not feel the burden anymore.

However, when you transfer an existing loan to a new loan, there are various procedures and hurdles that you will face. It is similar to getting a new loan and you need to cover up all the applications and various other procedures that you had done previously to take a home loan. The most important thing that you need to consider about a home loan balance transfer is that you need to settle down only for a low rate of interest and a better tenure.

• Take a home loan transfer only when you get a better rate of interest. The only purpose behind transferring a home loan is the burden that you’re feeling because of the high rate of interest. Therefore it does not make sense if you are transferring a home loan to a new loan provider for the same rate of interest or a rate of interest more than what you were getting previously. Hence, it will be a hurdle to find the loan provider that offers you a better rate of interest than the previous one. Therefore you need to find and research a lot to get the right loan provider that offers you a lower rate of interest.

• A home loan balance transfer also makes you eligible to get a new loan. Yes, if you need a new loan or you need some extra cash you can go for a home loan balance transfer. However, since it is a new loan you will have to go through the entire application process where your credit score and previous track record will be screened. If your credit score or your track record is not good, there will be hurdles that you will be facing during the home loan balance transfer procedure.

• Documentation is one of the important things that you need to take care of while home loan balance transfer. There will be legal procedures with the existing home loan provider and the new home loan provider that you’re transferring the loan to. You must check all the loan agreements and various formal documents carefully before accepting a new loan.

Wrapping up

If you feel that a home loan will become a burden, you can go for a house repair loan. A house repair loan is an affordable loan that helps you to remodel your existing home without spending huge on a new home.