Obtaining a mortgage loan for personal financing of expenses is a popular method to meet large scale expenditures. It is an ideal time to avail such loans as market interest rates are currently falling.
Lower interest rates can also be advantageous for individuals with an existing mortgage loan availed at a relatively higher interest rate. To minimise this financial burden, you can opt for a balance transfer of an existing loan against property, thereby effectively reducing your monthly EMI payments.
Loan balance transfers are usually done when the market interest rates are lower than the one against which credit is availed. A lower interest burden effectively reduces the monthly EMI payments of a borrower.
You can also reduce your interest payments through a loan transfer by reducing its tenor. Interest rates are compounded annually on the total principal amount borrowed and added to monthly EMI payments. Even though reducing the loan tenor increases monthly EMI payments, interest component of the same falls drastically.
Most financial institutions levy no additional charges on foreclosure or part prepayment on loan against property balance transfer. This helps an individual save massive amounts otherwise spent on interest liability through premature repayment of the total loan amount.
Additional Read: Save On Interest Rates With A Balance Transfer On A Mortgage Loan
