A loan against property balance transfer facility enables individuals to transfer their outstanding loan balance from their current lender to another lending institution seamlessly. Moreover, borrowers can avail benefits such as flexible loan tenure, favourable interest rates, a higher loan-to-value ratio based on the property’s current market value, and top-notch customer service. This guide will provide a comprehensive overview of how to optimise finances via this transfer facility.
What are the different advantages a loan against property balance transfer offers?
The loan against property balance transfer facility allows individuals to transfer the outstanding amount of their loan to another lender, offering several advantages. Here are some of its key benefits:
- Speedy approval
The LAP balance transfer offers a swift approval process, granting borrowers access to their loan amount. With a quick and efficient document verification process, borrowers can avail property loan balance transfer. Furthermore, they can utilise these funds for various financial needs such as medical emergencies, weddings, or renovations of homes.
- Reduces interest rates
Borrowers can choose reduced interest rates for their loan against property, enabling them to manage their expenses and switch to a more suitable option. This facility allows them to continue with the same loan plan but with decreased interest rates, enhancing their financial benefits.
- Sizeable top-up loan
Individuals can receive a substantial top-up to their existing loan amount by transferring their balance to a new lending institution. It allows one to obtain a top-up loan of up to a certain amount based on their eligibility. Additionally, with a top-up credit, they can enjoy tax benefits for a loan against property.
- No foreclosure charges
Borrowers with a floating interest rate can make prepayments of their monthly instalments to clear their debts early with a loan against property balance transfer feature. They can make partial prepayments without incurring any additional charges to foreclose their loan.
- Loan against property calculator
Borrowers can access a loan against property EMI calculator, enabling them to calculate their EMIs and have better transparency with their lending institution regarding the funds they save by transferring their outstanding loan balance.
What are the factors influencing the loan against property balance transfer interest rate?
Here are some factors that influence the loan against property balance transfer interest rate:
- Loan-to-Value Ratio (LTV)
The ratio of the loan amount to the property’s value affects the interest rate. A lower LTV ratio can lead to a more competitive interest rate.
- Credit score
An individual’s credit score significantly influences the interest rate offered by the new lender. A higher credit score usually means a better interest rate because it shows the borrower is financially reliable.
- Policies of the lender
Each lender has its own rules for setting interest rates. Therefore, borrowers should understand these policies, and compare them when deciding on a balance transfer.
- Economic factors
External economic conditions like inflation rates, prevailing market interest rates, and the country’s monetary policy can influence the overall interest rates of loans.
What are the loan against property tax benefits individuals can claim?
Individuals receive various loan against property tax benefits when they apply for this credit type:
- Salaried individuals can claim tax benefits under Section 24(B) of the Income Tax Act. They are entitled to deductions of up to Rs.2 lakh under this scheme.
- Individuals opting for a property loan for commercial purposes can apply for tax deductions under Section 37(1) of the Income Tax Act. Furthermore, the processing fees related to the loan are also eligible for tax benefits.
Various top financial institutions provide pre-approved offers to individuals at attractive rates. They can check these deals by entering their details on the official website of the lending institutions. These offers speed up the application process and are usually applicable on loans against property, home loans etc.
Hence, a loan against property balance transfer offers a special chance for individuals aiming to lower their interest expenses and improve their financial situation. This balance transfer procedure can be completed effortlessly and without any hassle.
