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Update Date : 03-Jan-2023

Created Date : 03-Jan-2023

Category : Home Loan E-Book (Promotional_BT)

Here’s how you can optimize the benefits while transferring your home loan balance to another lender

In the previous chapter, we discussed various reasons why home loan borrowers are so keen to transfer their loan portfolio to other lenders.

In this one, we will cover how you can optimize the process and its benefits.

The following are some of the inputs that can help you make the most from your home loan refinancing exercise.

1. Analyze your future financial needs and restructure your loan – Restructuring your loan allows you to revise all of the future terms of your home loan.

It includes:

• Lowering the rate.

• Switching from monthly reducing to a daily reducing method.

• Revising the loan tenure.

• Revising the amount of EMI.

• And most importantly, switching to a better product.

When you refinance your loan, you must take into account your current cash flow and future cash requirements.

Based on that, you can figure out the amount of EMI you must pay and the amount you must invest.

Simply finishing your loan sooner and contributing nothing towards your investments may not work out in the best of your interest.

2. Consolidate all your expensive loans into one – Consolidating all your loans into one at better terms is what a top-up loan can do for you.

You may have a personal loan, a car loan, some credit card dues, a gold loan or many other loans whose rate of interest and the amount of EMI are high.

You can consolidate all such loans into a home loan top-up at a much lower rate of interest and tenure as high as your home loan tenure.

This can help you ease pressure on your cash flow and make better utilization of funds.

3. Negotiate for the best rate of interest – Of course, availing the lowest rate of interest is on every loan borrower’s cards.

You must negotiate for the best rate possible with your prospective lender.

Also, remember that quality far outweighs quantity.

It simply means that grabbing flashy deals that look attractive but lack value in long run should be avoided.

Selecting a lender just for the rates they offer should be avoided too.

Instead, a lender that follows fair lending policies and complete transparency in their dealings should be preferred. Further, engage them in negotiation.

4. Explore the benefits of a home loan overdraft account – A home loan is way beyond interest rates and processing charges.

Explore products that offer much greater value than the premium they charge.

Let in-depth calculations and logic be the foundation of every financial decision.

Products like home loan overdraft facilities can not only offer you higher savings on your home loan but can also streamline your financial life to a great extent.

Explore the benefits. Perform a cost-benefit analysis and look at what works for you.

5. Look for the online prepayment facility – Online prepayment facility not only help you save inconvenience & time but also money.

The ability to make a quick online payment at a click of a button can save you a great deal of interest that is compounded on a daily basis.

Hence, ensure that the bank you’ve shortlisted allows you to make part prepayments online.

6. And many more…