Shubham Housing Finance has been serving customers for almost a decade now with the singular mission of providing a home for every family. For many of our customers, a Home Loan is their first or second loan in life and is a major financial decision, which sometimes their well-wishers in their personal circle are also not equipped to advise on. Hence, Shubham takes its responsibility of educating its customers and helping them make the right decision, very seriously.
In this blog, we explain that switching to a new home loan provider can result in great benefits if the rates you are currently paying or the service provided by your lender is not what you like. But before thinking of a home loan balance transfer or loan against property balance transfer to a housing finance company, you need to consider all the details and make sure you make the right decision.
A Home loan is a way that most middle-class people buy homes in India. As the home loan is of a long tenure, sometimes changes in the family’s financial or social circumstances make families re-assess their loan obligations and see if there are better opportunities available than the existing loan. A home loan balance transfer is a convenient way of refinancing your home with a new partner and a new agreement in place.
Some homeowners who have a fixed-rate home loan may want to take advantage of the opportunity to switch it over to a variable rate home loan or refinance at the existing rate of interest, which may often be lower than the earlier interest rates.
Before considering this as a choice, you should know the basics involved in a home loan balance transfer. Let’s explore your options in detail.
Top 5 reasons Home Owners choose a home loan transfer:
- The lower interest rate on a home loan or loan against property: Let’s face it. Going by conventional wisdom, lower interest rates are the cornerstone for a good home loan offer. We are all tempted by lower interest rates on home loans and the banks and government also want to keep it low since owning a home is a fundamental desire and need for all families. If a new home loan comes at a rate that is 3-4% lower than your existing home loan, it will save you money in the long run rather than your existing home loan.
- Better loan terms on your home loan: Financial institutions regularly keep coming up with new products or loan programs that are better than other existing home loan offers. Very often it can be the case that a loan that you took 10 years ago may be available at better terms now.
- Opportunity to get a top-up loan: If you took a loan some time ago or your property value has appreciated very fast due to other factors, such as a major infrastructure project such as a highway, metro, or other developments being announced nearby, a home loan balance transfer also allows you to get a top-up loan which you may be able to use for additional construction, renovation of your house, or even as investment in your business.
- Poor service from your current home loan provider: As a home loan customer, you should monitor both pre-loan and post-loan service parameters to see if your bank is a good fit for your needs. If they are not living up to expectations, it may be time to speak with someone at the bank about how their services can better meet your needs. Remember, the worst that can happen is that you are told ‘no’. The best that can happen is that your queries may be easily resolved. Nowadays there are multiple ways to contact your home loan provider. For example, did you know you can contact Shubham Housing Finance in 6 different ways!
- Loan consolidation options for multiple loans: There are also times when it makes sense to consolidate your loans and other debt into one single loan. Just like you can do a home loan balance transfer, you can also consolidate other loans into one loan or at the very least, a single provider. For those who have multiple debts or looking for better longer-term solutions, consolidating multiple loans into one may make financial sense. This will ensure that you do not get into financial problems later on and have a more positive outlook on the future.
How to do a home loan balance transfer to Shubham Housing Finance?
If you are looking for a home loan balance transfer on your current home loan for any reason, you can reasonably trust Shubham Housing Development Finance Company Ltd to be the partner who can help you with your home loan transfer process.
As of July 2021, Shubham is a trusted home loan provider to 40,000+ families, through 100 Shubham branch offices spread across 12 states in India. We offer multiple kinds of loans for people who earn in cash or who need a loan with fewer documentation requirements.
Full Process to apply for a home loan balance transfer:
- As step one, you need to identify which NBFC or Bank is the right partner for you to transfer your home loan to. At Shubham Housing Finance, we always encourage customers to know that Shubham HDFC is a government-registered Housing Finance Company (HFC) that operates under regulations of the Reserve Bank of India and the National Housing Bank and has excellent credit ratings. This ensures complete peace of mind when you transfer your loan to Shubham.
- As step two, you must submit an application to your current home loan provider, asking for a loan statement mentioning all the details of your loan – the amount sanctioned, amount paid, amount outstanding, any missed repayments, etc. Along with this, you will also need to request a No Objection Certificate (NOC) from your bank for the purpose of a ‘home loan balance transfer’.
- Step three is usually a re-negotiation with your existing home loan provider. When you switch your home loan to a new housing finance company, the process can be lengthy and costly. Talk to your current home loan company about any special deals they might offer for you to opt for continuing with them.
- As step four, your new lender will approve your loan and once you informal your old bank of the same, they will start the process of closing your account. Subsequently, your old loan account will be closed and your loan will be transferred to your new lending partner.
Five reasons why a home loan transfer is not a good idea:
- If you have missed your EMIs multiple times in the past, or have not been regular with your payments, there is a high chance that a housing finance company will not take up your loan application. Remember, any home loan is given at the sole discretion of the lending company and in case of any discrepancy, they will reject your application rather than approve it as they must minimize the risk of the company first.
- When thinking of switching to a new housing finance company, you should make sure you compare the total cost for both existing and new home loans. Consider all the costs that come with a home loan balance transfer – application fee, processing fee, any foreclosure charges to your previous housing finance partner, and also the time and effort it will take for you to go through the process all over again!
- If you have already completed a major part of your loan tenure then you may prolong your lock-in period in case of a home loan balance transfer. During this period you can not foreclose or pre-pay your loan. Similarly, if you had taken other loans after your home loan and they are still being repaid, there is a high chance that your new home loan company may push you to opt for a higher interest rate as compared to the existing home loan, to cover their risk.
- Remember the old saying – There Ain’t No Such Thing As A Free Lunch (TANSTAAFL). Don’t fall for advertisement gimmicks or smart copywriting that makes it sound as if you are getting a great offer when the reality may be quite the opposite. In case you are switching from one company to another, read all the terms and conditions very carefully. Also remember, the terms and conditions in an advertisement and in a loan agreement, both are necessary and may be mutually exclusive, meaning you are bound by both independently. Did you know that Shubham’s Terms and Conditions are mentioned on our website and are accessible to everyone.
- Don’t transfer your home loan because of one problem that you faced with the existing home loan company or because you had one bad interaction with them. Remember, you will have to deal with multiple people in any organization you transfer your loan to, and being a long relationship lasting from 5 to 30 years, you will have mostly good but also some not-so-good interactions with the person you may end up dealing with. Every company tries its level best to deliver good service to its customers because they are the ones for whom the company exists. Value your long relationship with the company and trust them to do the right thing for you.
With all the above knowledge, if you would like to take the first step forward today for owning your home, transferring your home loan, or knowing how these options can be of help to you, call Shubham Housing Finance on our Toll-Free number 1800-258-222-5 or message us on Whatsapp to get started today!