When should you opt for home loan balance transfer?

financialexpress.com:

Sometimes home loan transfer becomes a necessity due to higher interest rates or when you are looking for better services and customer support. It is seen people often avoid loan transfer unless and until it is too difficult for them to continue with the old loan. However, opting for a home loan transfer, also known as balance transfer or refinancing, can be beneficial under certain circumstances for home loan borrowers.

It is important for you to understand when is the right time for you to opt for your home loan transfer. Should you consider just the interest rate as a factor or there are other circumstances as well which can make you consider this decision.

Here are some situations when a borrower may consider a loan transfer.

If the prevailing market interest rates are lower than the interest rate on your current home loan, a loan transfer can help you switch to a new lender offering a lower interest rate. By doing so, you can reduce your EMIs and overall interest burden, potentially saving a significant amount over the loan tenure.

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Besides lower interest rates, a loan transfer may allow you to avail better terms and conditions, such as flexible repayment options, reduced processing fees, or improved customer service. It’s essential to compare the overall benefits and costs associated with the new loan.

If your credit score has improved since you took the original loan, you may be eligible for a better interest rate from another lender. A higher credit score reflects improved creditworthiness and can be leveraged for more favourable loan terms.

Adhil Shetty, CEO, Bankbazaar.com, says, “It’s important to keep an