Home Loan Balance Transfer vs Top-Up Loan

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home loans

Have you taken out a home loan to help you realize your biggest dream? Well, there’s no doubt that the possibility of owning a home is fascinating in and of itself, and you’re doing your best to keep up with your payments. Life, on the other hand, has a habit of deviating from our plans. What if you unexpectedly run out of money or need more money than your current housing loan can provide? Lenders make unique offers during certain times, such as home loan balance transfers and home loan top-ups.

Home Loan Top-Up

A home loan top-up is an addition to your existing housing loan that is approved by a lending institution. Consider it similar to topping up your phone’s balance when it starts to run low. You can get a top-up loan from your current lender or move to a new lender with a lower ROI.

A home loan top-up of credit is a great alternative to a personal loan. Most of the time, when we need money for personal reasons, we take out a personal loan. A personal loan isn’t the sole option for getting a multi-purpose loan. There are alternatives to personal loans that are better, cheaper, and faster. One of these choices is a home loan top-up.

A top-up loan can be obtained on an existing housing loan. It is a multipurpose loan. Borrowers can utilize this open-ended loan for a variety of personal purposes, including home furnishings, wedding expenses, vacations, and the purchase of household appliances, among others.

Home Loan Balance Transfer

A home loan balance transfer allows you to change lenders in order to improve the return on your housing loan. What would you do if you took out a housing loan at 11.1 percent interest and then discovered that a lending institution is offering you home loan interest rates as low as 9.05 percent? You refinance and get a new housing loan with a balance transfer. If your current lender gives you bad customer service, you can switch.

Currently, the majority of loans are taken out under a floating interest rate. When the MCLR rises, the interest rate you were paying will almost certainly rise as well. In such cases, a balance transfer may be the only way to avoid a rate hike.

Banks are no exception when it comes to wanting to have satisfied clients. Every financial institution would welcome you as a valued customer if you pay your EMIs on time and have a good credit history. One can take advantage of such a situation by negotiating a lower interest rate. It goes without saying that lenders give lower interest rates to customers who are still paying off their loans and have a good repayment history.

A lower interest rate reduces the amount of money you have to pay in monthly installments. You may save a small amount on each EMI, but when you sum it all up, you’ll be astonished at how much money you’ve saved on the whole loan cost.

Conclusion

A home loan is a type of finance that has a low-interest rate. Housing loans offer plenty of advantages in addition to making your dream home a reality. A housing loan is more appropriately referred to as an investment because it allows you to become the owner of a property after a period of time. A housing loan saves you money on taxes, the housing loan transfer process lowers loan costs, and a top-up home loan provides you with an emergency fund. The benefits of a housing loan are usually appealing and advantageous to the borrower.

 

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