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Which is more beneficial for home loan - Balance Transfer or Top up

Which is more beneficial for home loan - Balance Transfer or Top up

When you avail a home loan, it doesn’t only act as the primary financial support to buy your home. There are many added advantages that can be availed by an existing home loan borrower. The best part of taking a home loan is that it makes you own a property without putting much financial pressure.

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A Home loan is the best example of a good credit. The benefits of home loans are many in numbers. A home loan makes you a proud property owner once the loan repayment is done in full. Moreover, the capital appreciation is certain to make your own much more than what you have invested in the last few years.

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A home loan generally runs for decades and during that period a home loan borrower is eligible for availing a number of benefits from the existing home loan. In this article, we are going to touch two different advantages of having a home loan. One of these two factors will help you to reduce the loan cost while the other one will help you to fulfill the extra fun requirement at any time. The two terms that we are going to study in this article are Home Loan Balance Transfer and Home Loan Top Up.

Home Loan Balance Transfer

A home loan balance transfer is a process which makes your outstanding home loan balance transfer to another financial institution. A balance transfer of a loan makes you continue the loan but with a new lender. Most of the times, a balance transfer of home can give you the benefit of low-interest rate.

Most of the loans at present day are taken at a floating interest rate. Whenever there is a hike in MCLR, the interest rate which you were paying is certain to get affected by the same. In such scenarios, a balance transfer can act as the only shield against the rate surge.

Any business wants to have good customers on board and banks are not an exception. If you are disciplined with your EMIs and own an excellent credit history, every financial institution will welcome you as their valued customer. One can take an advantage of such a situation and make a negotiation on the rate of interest. Needless to mention that lenders offer a much competitive interest rate for those borrowers who are early in their loan tenure and have an excellent repayment history.

A reduced interest rate minimises the amount that you were paying in monthly installments. You may save a little money in each EMI but if you add it up you would be surprised to see what a great amount you have saved in total loan cost.

Home Loan Top-up

A top-up home loan is an excellent alternative to a personal loan. Most of the time whenever we are in need of money for our personal use, we opt for a personal loan. A personal loan is not the only way to avail multi-purpose fund. There are options which are better, cheaper and faster than personal loans. A home loan top-up is one of those options.

One can avail a top up on his/her existing home loan. A home loan top up is a multipurpose loan. This open-ended loan can be used for any personal use of borrowers such as home furnishing, marriage expenses, taking a vacation, purchasing home appliances and many more.

A home loan top up is a much pocket-friendly way of getting an emergency fund than a personal loan. A personal loan interest rate at present-day starts at 11.99% whereas one can avail a home loan top up at 1% more than the home loan interest rate. A home loan top up is much cheaper than a personal loan.

Though a personal loan online is renowned for being faster in processing and disbursal, actually if you avail a home loan top up it would be faster. The reason which makes a top-up loan faster is that the lender already has all your documents. So a home loan top-up applicant need to submit the documents to the lender.  In a home loan top up, the process of document verification can simply be skipped. Availing a home loan top up instead of a personal loan is a much appreciable financial decision.

The Bottom Line

A home loan is such a credit which comes at a minimal interest rate. Home loans come with many benefits while making your dream home affordable. A home loan can better be called as an investment as it makes you being the owner of a property after some time. A home loan saves much in tax payment, the home loan transfer process decreases the loan cost and a top-up home loan provides you emergency fund. The advantages of a home loan are always welcoming and beneficial for the borrower.