There could be many situations in life when you have already have an existing House Loan, but your lender is charging you an exorbitant Housing Loan interest rate. During such situations, it would be prudent to ask your existing lender to adjust your interest rates.
If it declines, opting for Home Loan transfer and also avail a top up loan for other needs and enjoy greater savings. Yes, modern-day finances have made it easier for you to switch your Housing Loan account to another lender if you are not happy with its services or interest rates.
What is Home Loan balance transfer?
If you have an already existing Home Loan account with a lender and find that some other lender is offering an inexpensive House Loan, you can switch the loan to a new one.
The facility is known as Home Loan balance transfer. You can switch your existing House Loan outstanding balance to a new lender to get the benefit of a lower Home Loan rates.
The only thing that you should keep in mind is that you have to pay some charges for availing the facility. It could be anywhere between 1-2% of the total outstanding Home Loan balance.
Before switching the Housing Loan account to a new lender, you should make sure to see whether the penalty charges are more than what you will save on the switch. If it’s more than what you will get benefited from, do not avail the facility.
What is a top up loan?
Leading non-banking finance companies offer the facility of a top up loan to customers who switch their Housing Loan accounts to them via Home Loan balance transfer.
A top up loan helps you avail a loan up to Rs.50 lakh at a lower rate of interest and with an extended tenor to compliment various other financial needs.
The perk of a top loan is that it helps you repay the loan over a longer tenor just like your Home Loan so that repaying it via EMIs is super affordable.
Since it’s a facility that you get along with Home Loan balance transfer, the interest rate charged on it is much lower as compared to a personal loan.
Thus, if you have needs of a personal loan and already have an existing Home Loan, avail the Top Up Loan facility on Home Loan and save huge!
Some features of top up loan at a glance
Top up loans have many beneficial features which you should know such as:
- Easy eligibility – Since a top up loan on Home Loan is an additional facility on an existing Home Loan; there are additional eligibility conditions to match. If you are eligible for Home Loan balance transfer, you are good to apply for a top up loan as well.
- Flexible tenor – The tenor that you get for your top up loan on Home Loan is same as your housing loan as it’s an additional facility that you get. As a result, you would make timely repayments on a longer tenor, and a shorter tenor would make it expensive.
- Hassle-free application – Once you qualify for Home Loan balance transfer, you can apply for a top up loan as well. Once your Home Loan balance transfer formalities are complete, you can request a top up loan with your new lender.
The Bottom Line
A top up loan on Home Loan makes it easier to cover your other financial needs at a lower rate, extended tenor making it super affordable. You can apply for Home Loan balance transfer and a top up loan if you are unhappy with your existing Home Loan creditor!