If you are unhappy with your existing lending terms on your loan against property, opt for the Bajaj Housing Finance Limited balance transfer facility and enjoy competitive interest rates with affordable EMIs. The process is simple enough, and what’s more, is that you can even avail of a top-up loan of Rs.1 crore* to refinance your existing one. It not only gives you a better repayment plan, but you also get additional funds at nominal interest rates to address any new big-ticket expense.
While the balance transfer facility is extremely beneficial, individual borrowers must evaluate their cases and see if it is a move that makes the most sense for them. There are several things to consider before one opts to transfer their loan balance, and not taking them into account could translate to additional expenses.
In this article, we list out five things borrowers must look at before they transfer their loan against property balance to a new lender. Read on to learn more.
5 Key Things to Remember Before Transferring Your Loan
1. Lender Comparison
The loan against property balance transfer facility is a chance to start afresh, with a lower rate of interest and better lending terms, and this will only be achieved if you find a lender who is willing to give you an interest rate that is lower than your existing one – making your mortgage loan less expensive.
2. Check Your Current Lender’s Stand on Balance Transfers
While most industry lenders allow for mortgage loan balances to be transferred, it's still prudent to be doubly sure considering special clauses. Ensure that you speak with your current lender and confirm that they will make this facility available to you and find out what their requisites are. Additionally, read your loan terms and agreements and check if there are any special clauses regarding the same.
3. Take Stock of Your Repayment Status
Balance transfers will benefit you only if you have a sizeable portion of your loan still waiting to be paid back. If you are more than halfway through your repayment tenor, or even more, it makes little sense to migrate the balance amount to a new lender, seeing as the additional cost of transferring the loan may outweigh the remaining amount. We suggest calculating the costs of a balance transfer before approaching your lender for a balance transfer.
Before you make this commitment, ensure that you’ve done your research and approach banks that are more likely to give you what you desire, in terms of an interest rate and loan tenor. Approaching numerous lenders at one go will negatively impact your credit score, and project you as a high-risk loan applicant. Zero in on your preferred lender and negotiate based on your eligibility for favourable lending terms.
4. EMI Repayment Record
Note that your new lender will assess your repayment capacity, credit profile, EMI repayment record afresh before they approve your application for a balance transfer. While it's possible that the scrutiny is lesser if you have an existing loan, your application and profile are still appraised by your new lender to verify if your financial standing is up to the mark of the lending terms that will be offered to you. This means that you must continue your efforts in maintaining a healthy CIBIL score by meeting all your financial obligations on time, and by not defaulting on any EMI payments.
Your new lender will also want to vet your existing loan documents such as loan approval letters, property documents, interest certificates before they agree to foreclose the loan on your behalf. Ensure you have all these documents in place, along with your age, income, and address proof so your balance transfer process remains hassle-free.
5. Cost of Transferring
Lastly, but most importantly – it is imperative that you understand the costs involved in transferring your loan balance to a new lender. While the Reserve Bank of India has ruled out any prepayment and foreclosure fees for individual borrowers with floating rate loan, there are still several costs attached to the balance transfer. Ensure that you are aware of all the fees involved, so you can plan your finances in a way that accommodates these.
The point of transferring your loan balance to a new lender is to seek a more affordable option to service your debt. Paying high fees while transferring said loan might defeat the purpose.
Types of Loans Against Property
Bajaj Housing Finance Limited offers several types of loans against property that are designed to serve your financial needs in the best way possible. Check our list to know more about what we offer, and which could be the best match for you.
· Loan against residential property: The most sought-after mortgage loan type, this loan can be taken against a residential property you already live in, rent out or have vacant.
· Loan against commercial property: As the name suggests, in such cases, the loan sanctioned to you are given against a commercial property you’ve offered as collateral. This includes office spaces and industrial units, as per its current market value.
· Lease rental discounting: This loan type lets you put up any property you have leased as collateral. In such cases, EMI payments are deducted from the rentals received as lease revenue and the loan amount is calculated accordingly.
The benefit of taking a loan against your property from Bajaj Housing Finance Limited is the loan turnaround time, which is speedy and minimal – ensuring that you have the funds you desire within a short span of time. If your loan application has been approved and meets all the key eligibility parameters, the loan amount will be disbursed into your bank account in a time as little as 72 hours*.
Borrowers utilise the loan against property option to fund overseas education or finance a wedding or medical cost, or any unforeseen big-ticket expense that may have come at a time of a cash crunch as the loan amount has no restrictions on its end use.
The loan against property eligibility criteria are easy to meet and fuss-free, focussed on making the borrowing process as hassle-free and seamless as we can make it. Our loans against property start from 8.25%* p.a. for salaried applicants, offering a sizeable loan amount of Rs.5 crore* and even more, basis eligibility. Repay the loan over a comfortable repayment tenor of up to 20 years and continue to make savings with our flexible-repayment plans.