A home loan might help you build your dream house. However, the rising inflation and soaring interest rates might make things difficult for you.
What if you cannot pay the high EMIs? Well, you can consider transferring your loan to another lender.
What is a balance transfer? It is nothing complicated. Your loan will get transferred to a different lender with a lower interest rate. That will make it easier for you to repay the loan.
Here is a step-by-step things to consider before going for a loan transfer before transferring your home loan or How to Rent-to-Own in Ontario.
Things To Consider Before Going For A Loan Transfer
1. Whether Your Lender Allows Balance Transfer
When you apply for a home loan, check whether your lender has a provision of the balance transfer. Some lending institutions don’t allow borrowers to transfer their loans. So, it is better to check if your lender has such a provision before you start searching for new lenders to transfer your loan.
What will you do if your lender does not have such a provision? Well, read the next point to find out.
2. Check If Your Lender Wants To Lower The Rate
Many times, the bank does not want to lose a customer. So, they might consider your situation. Approach them and explain your problems. Most likely, they will agree on a settlement to lower your interest rates for the remaining tenure. Try it out if you are an old customer of the bank.
3. Compare Different Lenders
So, if your bank doesn’t agree to lower the interest rate, you can go ahead with the balance transfer. But, you have to do your research before that. Look out for lenders who are offering lower interest rates than your current lender.
Make sure you compare different lenders. It will help you in getting the lowest housing loan interest rate.
4. Check The Benefits Your New Lender Is Offering
Well, lenders often offer numerous benefits when you transfer a loan to them. They might offer top-up facilities on your loan. Make sure you check the services offered by different lenders before making a final decision.
5. Consider Your Extra Costs And Charges
Transferring your loan can involve a lot of additional costs. You have to pay the processing fees, transfer costs, etc. Both your new and existing lender will charge transfer costs. You have to choose a lender who takes minimum extra charges. If your additional charges exceed your interest savings, there is no use in transferring the loan.
6. Go Through The Terms And Conditions
Do you ignore the terms and conditions? Well, it is always better to read them before finalizing your deal with the new lender. You never know. There might be certain conditions that will put you in trouble in the future.
Final Word
Transferring your loan can reduce your financial burden. However, do not make any decision in haste. Consider all the factors listed above before you make the final move for loan rates.
PNB Housing offers affordable interest rates on home loans. They also provide numerous additional benefits on transferring your home loan.
