When Is The Ideal Time For Refinancing Home Loan


When you have an active home loan account, then it means that a part of the income and expenses is bound to be affected by EMIs over the tenure. Sometimes, you may also avail another loan to fund any other needs. 

But when you have a debt to income ratio of 40-50%, then you need to pause and ponder over it. You may find another home loan lender offering a lower interest rate than your current one. You may regret that you should have waited for the deal as you would have saved big on EMI payments. 

If you are also stuck in a similar situation, then you don’t need to bother. It is because you can consider opting for the home loan transfer option. The ideal time for it is when you are paying higher EMIs consuming most of your income. 

By opting for the home loan balance transfer facility, you can easily manage to pay lower EMIs and manage outlays better. 

Let’s know more about the loan balance transfer and when to do that in this post!

What is meant by the home loan balance transfer?

The loan balance transfer is the process of transferring your ongoing home loan with a new lender offering a lower rate of interest. 

This way, you are able to pay way lesser EMIs as compared to your previous lender. It also helps you save every month and manage your expenses smoothly. 

The facility also comes with the top up loan that you can avail to access a significant amount with lower rates and the longer tenure. You are free to use the top up loan amount for anything as per your requirements. 

What factors to consider while going for the home loan transfer?

  • Check if your new lender is offering a reduced rate of interest 

The first rule of making the switch under the loan balance transfer facility is checking if the new lender is offering a lower interest rate than the previous one. If that’s true, then you may consider going for it. Doing that would help you pay the lower home loan EMIs

  • Check out the costs and loan terms involved 

You should be aware that only transferring your home loan account when there is a lower rate offer available is not what is considered. Yes, it is because when you opt for the loan balance transfer, some strings are attached to it. Hence, it becomes a must to understand the terms and cost of the home loan balance transfer. Thus, you should go through the terms and analyze the cost carefully. You should go for the balance transfer only if you are unhappy with your current lender. Before making the switch, you should use the home loan balance transfer calculator. It will help you to know about all costs involved earlier. 

  • Check if the option of the longer tenure is available 

It is good to go for the home loan balance transfer if the tenure of your home loan is longer. There will not be any sense to go for the loan balance transfer if you have only 1-2 years of the outstanding loan amount left. It is because the charges levied by your existing lender will be higher than what you will save while making the switch. If the tenure of your home loan is 20 years, then you can transfer it till 16-17 years. You should avoid doing that at the end of the tenure. 

  • Check if you have a higher outstanding loan amount 

Going for the home loan balance transfer is a viable solution when the outstanding loan amount is higher. If it is still higher, then it is better to go for the home loan transfer if you are getting a good deal from a creditor. 

Other than the discussed elements, you should also check if the new lender is offering you the top loan or not. 

The top loan on home loan transfer comes with enough money that you can use to pay for any extra expenses.

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