What if there was a way to lower the interest rate on your existing home loan by taking a new one? Yes! Through the refinancing option, you can switch your housing loan from your existing lender to a new one, preferably offering better facilities and service.
Refinancing may even help you close your loan faster and in a more affordable manner. Want to know why refinancing housing loans is a useful choice? Read on.
Why refinancing your housing loan is a good idea
• Lower interest rates
One of the main reasons why refinancing is useful and popular is the possibility of lower home loan interest rates. In the current market, interest rates are at an all-time low. If you find another lender offering lower rates, opting for a new loan will help. You can save significantly on interest costs, thereby reducing the monthly EMI.
• Reducing the tenure of the loan
It could be possible that your financial position (monthly income) may improve over the years. And to a point where you might find yourself capable of closing the home loan sooner than your existing tenure. In such a case, you can refinance the loan and opt for a shorter tenure with the new loan.
Additional Read – Why Should You Opt For Home Loan Refinancing When The Rates Are Low
• Availing better service for your loan
After availing of home finance, you may find that your existing lender’s loan service is not up to your expectations. In such a case, you can opt for a home loan refinancing. But before you do so, make sure you run a thorough background check on the new lender. Go through customer reviews online and not just on the lender’s website. Other than that, you can also ask for personal opinions from people who may have availed of the services of the new lender.
• Switching from fixed to floating interest rates
If you get to know that the interest rates on housing loans are expected to fall further in the future, you may want to shift from a fixed interest rate to a floating interest rate. This switch can help you save on interest cost when the rates fall. But keep in mind that you may be levied a certain charge in the form of a convenience fee to make the switch.
• Opting for a higher loan principal
It is not uncommon for people to take a loan only to find out later that they may need additional funds. If you find yourself in a similar position, consider refinancing your housing loan, as it will help you opt for a higher loan principal with the new lender.
Additional Read –Top 5 Emergency Options to Use For Repayment of Housing Loan EMIs
Over to you
No matter what your reason, if you’re looking to refinance your loan to a new lender, consider switching to Tata Capital. Our interest rates are one of the lowest in the market, starting at just 6.70%. You can choose a principal up to Rs. 5 crores and tenure up to 30 years.
Use our home loan EMI calculator to adjust the loan principal or tenure for a suitable monthly payment.