In case you are servicing a home loan at a rate that is not favorable to you or facing issues to keep up with the EMI commitments, you can consider opting for a home loan balance transfer option to enjoy a lower interest rate and affordable EMI.
What is a home loan balance transfer?
A home loan balance transfer is the procedure where you can shift your principal amount on home loan to another lender at a lower rate of interest. On approval of your transfer option, your outstanding loan amount is transferred to another lender who forecloses your home loan on your behalf. Nearly all lenders grant the home loan balance transfer option. Note that approval of the facility is dependent upon your potential to keep up with your EMI commitments without default. To know your eligibility and compute your savings on the home loan refinance option, you can take the help of a home loan balance transfer calculator.
What is a home loan transfer calculator?
A home loan refinance calculator is an extremely useful online instrument through which you can calculate your savings on interest component on the transfer option. You just need to input the necessary details on the home loan transfer calculator to know your overall savings. In case your savings on interest component through the transfer option are substantial, you can opt for a home loan balance transfer facility.
Here’s how you can use the home loan balance transfer calculator
Using the home loan refinance calculator is a very simple and easy procedure. All you require doing is filling up the necessary details and the refinance calculator will show you the estimated value you will save by transferring your balance amount. The crucial details asked by the balance calculator are:
- Principal outstanding amount of your existing home loan
- Repayment tenure of your existing home loan
- Interest rate of your existing home loan
- Serviceable repayment tenure on your new home loan
- Offered interest rate on your new home loan
After you fill up all the important details, your overall savings on the transfer option will be displayed immediately. In case your savings on the transfer option is considerably high, you may choose the balance transfer option. Ensure to factor in the service charges also while calculating your overall savings on the transfer option. In a few cases, lenders may increase the service charges of the balance transfer option to make up for the lower balance transfer rate.
Home loan balance transfer calculator is the instrument that can assist you to make the correct decision. The calculator considers your ongoing home loan details like interest rate, loan amount, repayment tenure and overall EMI and home loan balance transfer lender’s details like offered interest rate and serviceable tenure. Based on these details, you can know your overall savings instantly and make an informed decision.