No one dreams of being under a tonne of debts, but situations are such that people do not have any other option but to take a Home Loan. It takes years to pay off a loan debt as it is not a small loan. A Home Loan is a very big decision in an individual’s life and it becomes bearable if you are able to manage it properly. It is necessary that you do a proper financial planning before you avail a Housing Loan.
Many times, it can happen that you will find yourself stuck with one lender, while there are many others who are providing a lower Housing Loan rate. The only motivating factor behind transferring your Home Loan to another lender is because the new lender is providing you with a lower rate of interest. But while you are thinking about all the money that you can save by availing a lower interest rate, it is necessary that you should also look into other things. They are:
1. Calculate the Expenditure:
Even though the financial institutions are reducing the amount of EMI that you pay every month, you need to understand that such facilities will only increase the tenor and the amount that you will end up paying. It is important that you compare the outflow for the current lender as well as the new lender. While transferring might seem like a good option at that moment, you should think about the long run and make your decisions accordingly.
2. Understand about the Processing Fees as well as other Charges:
Transferring your Home Loan to a new lender will not come free of charge. There are many charges like processing fees, stamp duty, technical charges, etc. that you need to take into consideration before you transfer your loan. All these charges should be included in the total outflow of your cash. If transferring your loan is costing a lot, then it might be wiser that you stick with your current lender.
3. The Remaining Tenor of the Loan:
This is another important point that you need to look into. If you have completed more than half the tenor of your loan with your current lender, then you should stick with him and should not transfer your Home Loan. You need to understand that transferring your Home Loan at this point will only result in paying extra money for your Home Loan. On the other hand, transferring your Home Loan will be a smarter option if you are still in the initial years of servicing your Home Loan.
4. Reading between the Lines:
It is vital that you read all the terms and conditions properly before transferring your Home Loan. Sometimes, it can happen that while reading the terms and conditions, you might have missed out on something really important that can cost you a lot in the future. It is important that you read and understand the pros and cons of each and every terms and condition listed. If you have some doubts, you can always clear it with your lender. After all, it is better to be safe than sorry, right?
The aforementioned points should be kept in mind before you transfer your Home Loan. There are many financial institutions who are looking to increase their business by giving the lowest Home Loan interest rates and attractive Home Loan offers. It is imperative that you think properly with a clear mind before you transfer your Home Loan to another financial institution.