HDFC Home Loan balance transfer: Everything You Should Know

Within a short span of time, HDFC bank has become one of the most reputed banks in the country. It has an extensive network of branches and ATMs all over the country, and its various loan offers are looked into closely by consumers, as well. One of the most important loans that people think about in the country is the one they have to take when they are buying their dream home. It is the means to your long treasured dream, which is why the importance of this loan cannot be overemphasized.

HDFC Home Loan balance transfer gets talked about a lot today because it caters to users' convenience. Given the reputation of the bank, there seems to be a lot of merit to it. Applying for this loan is probably going to be one of the most important decisions of your life. It's a decision that will have a long-term impact on your finances. Hence you can't take it lightly and certainly not without knowing everything that these loans from the bank entail. Only then can you make a sound decision for yourself.

HDFC Home Loan balance transfer: Check your Eligibility at the Onset

Before you go about understanding the features of this loan, you will have to know whether you are eligible for it in the first place. To begin with, these loans can be availed by salaried professionals and self employed individuals alike. They are meant for NRI's and Indian residents who are between 21 to 65 years of age. Your repayment capacity based on the fixed and stable income source will be taken into account. Your CIBIL credit score has to be good to ensure that you are eligible for these loans.

HDFC Home Loan balance transfer: The All-Important Interest Rates

This is probably the most important criterion that people base their decision on. The loan offer from HDFC has a floating interest rate of 10.5% to 11.25%. However, you also need to remember that the RPLR is currently 16.5%. The interest rate charged is not the only factor you should think about when applying for the loan. Remember, this loan involves a processing fee of 0.5% of the loan amount, which is capped at Rs. 10,000. There are no prepayment fees levied, but there is a pre-closure fee in case of fixed offers closed through balance transfer. In that case, 2% of the outstanding amount is applicable.

Other Factors that have to be considered

When you are looking at the merits of this loan, you have to remember the fact that the loan amount can fund 85% of the property value. The loan tenure can be chosen from anywhere between 1 and twenty years. The tenure you opt for will affect your monthly repayment options, which is something you cannot lose sight of. The good news, when applying for a HDFC Home Loan balance transfer, is that there is no guarantor required, as the bank would enforce a security on the home that you buy.

Only when you have done your research about these loans, should you opt for them to realize your long term dream of buying a house.

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Best Home Loan Balance Transfer Options That Can Save Your Day

Is your EMI eating up all your salary and leaving nothing for you to save? But then, you cannot deny that the loan you took has also made your dream come true of buying a house or a new car. So you cannot help but take a loan as it helps you in many ways. Hence, the best way to strike a balance between the two is to go for Home Loan Balance Transfer. By balance transfer it means you can choose to transfer the outstanding balance of the loan to get better terms and conditions. In fact, the best balance transfer options will help you to move from higher rate of interest to lowest rate on home loan interest so that you do not feel the excessive burden of repayment.

The best way to find some unbeatable interest rates on Home Loan Balance Transfer and cheapest home loan EMIs is by searching for the lenders and bankers. This is not a very easy task though. You will need some experts' advice who will guide you through the entire process. They will also see if you are at all eligible for taking up a balance transfer or not. It is easier said than done because it takes ample amount of time to finally get things rolling.

You also have the option to refinance your current mortgage loan or Home Loan Balance Transfer or consolidate a number of debts into one loan so that you can loosen your financial strain to a great extent. Mortgage refinancing goes a long way to help those with a debt burden get mortgage loan interest rates which is substantially lower. Firms which specializes in mortgages can easily suggests you constructive means through which you can avail the benefits of such add on services. In fact, mortgage specialists can very well help you to switch to a fixed rate and sometimes receive cash out to fund projects or make purchases.

While talking about mortgaging loan or Home Loan Balance Transfer, in case it is a long term investment like purchasing a house, the term of repayment will be longer thus resulting in lower EMIs. On the other hand, availing the services from experts, you can get a much higher value in case you want to trade your mortgage loan for cash. Thus, it is advised that to be on the right side of the profit margin, it is best to get in touch with mortgage specialists.

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Home Loan Balance Transfer Prepayments - Some Important Points

The high Home Loan Balance Transfer has forced the borrowers to think of prepayments. However, prepayment of home loans shouldn't be just done impulsively. There are a lot of factors to consider before making a decision to prepay a home loan or not. Here are some basic things to consider.

Factors to consider before prepayment

The current financial situation of the borrower: Is there enough money floating around to prepay the home loan?

How much money is needed immediately or in near future: Does the borrower have enough money to meet financial exigencies?

The Home Loan Balance Transfer: Are they likely to rise, remain at the same level or fall?

Are there investment options available which can give better returns (of course with minimal risks) 

than the current home loan rates?

Important points

Always calculate the total amount you have to pay to the bank. This included the home loan interest with the principal. This will give you a clear idea on the amount of money you owe to the bank.

If you are planning to invest the money instead of prepaying, calculate the total earnings by investments over the entire duration of loan amount. Always deduct the tax liabilities so as to reach exact figures. If subtracting your home loan repayment from the gains from investing, provide a surplus amount; it is always better to invest your money.

Prepayment penalties are also to be paid to the bank if you are not able to provide proofs that the money you are using to prepay is from windfall gains or your own. (People generally use Home loan balance transfers and get the money from other banks. In such cases banks will charge prepayment penalties).

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How to Get Maximum Benefit from an Offset Home Loan Account

You've most likely heard the term Offset Home Loan Balance Transfer; you may even have one yourself, happy in the knowledge that you're doing something to pay your mortgage off sooner.

It's actually one of the most powerful tools you have, allowing you to save thousands - even hundreds of thousands - of dollars over the life of your mortgage.

But - are you REALLY taking advantage of that Offset Account?

What is an offset Home Loan Balance Transfer?

An offset account is a transaction account that is linked to your home loan. The credit balance of your transaction account is 'offset' daily against the outstanding balance of your loan, thus reducing the interest payable on that loan. Over time, this can really add up to large savings and reduce the time it takes to pay off your loan.

If you put as much money as you can into your transactional account that's linked to your mortgage, you can save interest each day that your money is there. Your mortgage is calculated on the full amount of your remaining debt MINUS any offset funds you have accumulated. In other words, your mortgage will no longer be calculated on your full debt.

Here's an example: say you have a home loan balance of $200,000 and have $10,000 in your offset account. So, you'll only pay interest on $190,000 of your home loan.

In short, an offset account offers you more flexibility. You'll be paying off your mortgage quicker, but still have access to your funds if you need them.

What to look for

There are both full (100%) and partial offset accounts. With 100% offset accounts, interest rates are earned and paid at the same time, while a partial offset account is where the interest earned is only a portion of the rate paid on the Home Loan Balance Transfer.

What you can do

There are a few steps you can take to make sure you get the most out of your account. Have your wages deposited in your transaction account, so the money you earn is immediately helping to reduce the interest you pay on your home loan.

Even though you will most likely spend some of that money over the month it's still of use. Another example - let's say that you get paid on the 15th of every month but your mortgage repayment comes on the 28th. Even though there's only 13 days between them, you'll be saving the difference in interest on the amount in your account for that period of time, which can eventually add up to thousands.
Any savings or lump sum payments you receive should go directly into this account. Again, you'll still have access to the money if you need it, but the longer it stays in the account, the more interest is paid off.

Is an offset account for you?

An offset account is useful if you, like many people, can't pay lump-sum repayments into your loan. You may be saving up for something specific - like renovations, holiday or school funding. You can use that money wisely before you cash it out for the reason you're saving it.

However, it's wise to make sure there's still some money left in the account, as fees can rise once your account sinks past a certain amount. An offset account will really only work if you have a decent amount of savings. If you only have a few thousand dollars on a regular basis, your savings won't be significant.

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