HDFC Home Loan - Features & Benefits of HDFC Home Loans

HDFC Home Loan Interest Rate at 6.80%

HDFC offers Home Loan interest rate of 6.80% for loan amounts up to 30 lakhs for Women Applicants. The offer has been in effect since 11th January, 2021.

This special Housing Loan Scheme is for a limited period only, and can be availed if the loan is disbursed on or before 31st March, 2021. HDFC decides eligibility for the offer based on parameters such as credit scores, segments, details of other loans, etc., and is applicable only for applicants with the credit score of 730 and above.

The offer can be availed on Home Loans including Home Improvement, Home Extension, and even Refinancing/ Balance Transfer from other lenders.

However, as the offer is applicable only for loans under the ‘Adjustable Rate Home Loan Scheme’, it is subject to change at the time of disbursement. The rates are linked to HDFC's BenchMark Rate. Hence, they are variable throughout the loan period as well.

Features & Benefits of HDFC Home Loans

For Salaried Individuals:

HDFC Home Loans are offered for-

• Purchase of a bungalow, a flat, a row house from private developers in approved projects.
• Purchase of properties from the Development Authorities such as MHADA, DDA, etc.
• Purchase of properties in a Co-operative Housing Society/Apartment Owners' Association/Development Authorities settlements/privately built up homes.
• Construction on a freehold/leasehold plot or on a plot allotted by a Development Authority.
• You can get expert legal and technical counseling to help you take the right decision in buying a new home.
• You can avail the service of HDFC Home Loans throughout India with Integrated branch network.
• For those employed in the Indian Army, special arrangement with AGIF for Home Loans has been made.
  

For Self-employed Individuals:

HDFC Home Loans are offered for -

• Purchase of a bungalow, a flat, a row house from private developers in approved projects.
• Construction on a freehold/leasehold plot or on a plot allotted by a Development Authority.
• Purchase of properties from the Development Authorities such as MHADA, DDA, etc.
• Purchase of properties in a Co-operative Housing Society/Apartment Owners' Association/Development Authorities settlements/privately built up homes.
• Doorstep assistance and Innovative schemes on your Home Loan.
• You can get expert legal and technical counseling to help you in buying a home.
• You are offered attractive interest rates to make your Home Loan affordable.
• Integrated branch network for availing and servicing the home loan anywhere in India.
•  

Balance Transfer Credit Card - Credit Card Balance Transfer

If you have a huge loan or a heavy debt on a credit card, which you can't afford to pay off, do not think that you have met the end of the line. Even if you have no other means of backup in such a situation, the balance transfer facility could be an option for you.

As with loans, balance transfer is a viable alternative for credit cards as well. The service is offered by many card-issuing companies and banks, and you can avail it with relative ease.

What Is Balance Transfer?

BT is a facility in which you get a new credit card with a low APR, and then transfer your high credit balance to it from your old cards. Basically, you use a new card to pay off your debt on other cards, but you get the provision of paying a lower interest rate. You might even find a few balance transfer cards which offer 0% introductory APR for a limited period.

Why Opt for a Balance Transfer?

A few of the benefits of balance transfer credit cards are given below:

• Pay Less Interest: The very reason to even consider a balance transfer in the first place is that you get to pay a lower rate of interest than that at your previous credit card company. This can be either for your general financial benefit or to repay debt more easily.
  
  
• Streamline Your Finances: You can transfer your outstanding balance from multiple credit cards to a balance transfer card, thus streamlining all your payments into a single payment, which is much easier to manage. It is also unlikely that you will miss payments due to different billing cycles.

However, when would it be ideal to consider a balance transfer? How can you get a balance transfer done? What factors are to be considered before going for a balance transfer? Let's get a little deeper into it.

How Do Balance Transfer Credit Cards Work?

We, at mymoneykarma, strive to make your finances easier for you to understand. Mentioned below is a detailed step-by-step description of how the balance transfer facility works.

1. Search for the best and most suitable balance transfer facility. (Heads up! The next section deals with this in detail)
2. Apply for a balance transfer card - you could do so online, through your phone, or by visiting the card issuing company directly.
3. Provide the details required - such as the account number and the amount to be transferred.
4. Wait for the issuer to approve your request. The lender or card issuer will check your credit history and credit score before making a decision. There isn't any guarantee that your application will be approved; even if it does, the full amount might not be approved for transfer.
5. Understand the terms and conditions. A card issuer might not allow you to transfer debt between the products of their own company. However, you can move other types of debt (like a loan or a mortgage) to a balance transfer credit card.
6. Wait for three weeks and keep making payments on your old accounts till you get alerted by the new card issuer that the transfer procedure has been completed.
7. Once the balance transfer is successful, all your old cards will be wiped clean, and your entire debt will be transferred to your new card.
8. Try to pay off most of your balance within the introductory period when the APR is low. That's how you must utilize a balance transfer card to your advantage - save money on interest and pay off debt faster.
9. What about the old cards? Well, try not to close them, as doing so will make your credit score drop. Keeping your old accounts active is healthy for your credit history. However, if there is a hefty annual fee that you can't afford, you better cancel it rather than inviting more debt.

Gold Loan Balance Transfer - Benefits of getting a Gold Loan Balance Transfer

Want to know which is the most popular way to get a loan, or which is the most popular loan option? A Gold loan! It is not a modern or recent thing either. People have been taking gold loans for centuries in India. Whenever money was needed, they would take loans in lieu of their gold ornaments.

Gold loans are mostly taken to meet emergency situations, such as a medical emergency, to save one’s business, to meet a sudden demand on the market, and such. Thus, these loans are not typically taken to meet anything other than sudden needs and emergency situations. There is a good reason for this. Gold ornaments are often hereditary items, and are passed down generations in the same family. Thus, gold items and gold family heirlooms have a lot of sentimental value.

However, such views are changing. People have started taking gold loans for going on a dream vacation, to open a business, to finance a wedding, and so on. Yes, the sentimental value for gold is still there, but people are using it not just for emergency reasons any more.

One of the biggest benefits of gold loans is its liquidity. Depending on your requirements, you can use this loan for anything. The other big benefit is the ease of getting this type of loan. Go for any other personal loan and you’ll see how long-drawn and hard the application process can be. Not so in case gold loans. You need to submit minimal documents, and your gold items need to be of sufficient quality and quantity to get the amount you want. However, do understand that gold prices fluctuate. Thus, it’ll be better to take gold loans when gold’s market price is high. This means you may have to wait a bit before taking loans to avoid loss.

Now, it may happen that you may find out your current gold loan lender’s service is not suiting you any longer. For such reasons, you want to transfer your gold loan to another lender or bank. This is what is called a Gold Loan Transfer. You basically transfer your gold loan from one lender to another.

Here is why people want gold loans balance transfers

• Not being able to bear the burden of high interest rates
• Getting lower loan amounts that are not equal to the value of their gold
• Inflexible repayment options that cannot be adjusted
• Not being provided enough security for their gold
  

What are the benefits of getting a Gold Loan Balance Transfer?

• Higher per gram rates: Some lenders offer more value in lieu of the gold you deposit. It pays to be with the one who gives more Loan to Value Ratio or LTV.
• Better interest rates: Lots of banks offer lower rates if you transfer your loan over to them. Take this advantage and you can save a lot of money on interest.
• Flexible repayment option: Some banks offer more and easier repayment options. Pick those that do.
• Better security: If a lender offers better security, you may want to make the switch.

How to Do a Balance Transfer? - What is Balance Transfer?

If you have a huge loan or a heavy debt on a credit card that you can't afford to pay off, you could opt for a balance transfer facility. It allows you to transfer a high-interest credit card balance to a new credit card that has a lower interest rate. You might find a few balance transfer cards which offer 0% introductory APR for a limited period.

You can transfer your outstanding balance from multiple credit cards to a balance transfer card. It can streamline all your payments into a single payment, which is much easier to manage.

Steps to Do a Balance Transfer

Read on to know how you can do a balance transfer in 6 steps.

Calculate: Educate yourself on your own credit history before you opt for a balance transfer. Go through your credit balances and APRs. You must pick an appropriate card for balance transfer based on this information. It should have low or no balance transfer fees and the issuer must approve the amount you wish to transfer.

Choose: Once you have done the calculation, you need to find the right card. Options are aplenty. However, you might not be able to transfer your entire debt to a single balance transfer card. Also, you must find one with a low introductory APR. Most balance transfer cards initially offer 0% APR for a limited time. Don't forget to find out how much the fees would be after the introductory offer on APR is over.

Understand: Understanding the terms and conditions before buying the card is of paramount importance. A handful of these balance transfer cards have a balance transfer fee, usually within 3% to 5%. This fee is levied on each balance transfer.

For example, you already have an APR of 12%. The balance transfer card offers an APR of 10%. Over and above that, you have to pay a balance transfer fee of 4%. That doesn't look profitable at all. You won't save anything; on the contrary, you will pay more than before!

Also, check the following:

• Credit limit or amount of balance that can be transferred.
• Duration of the promotional offer of low APR.
• Any restriction on specific types of card or card issuing company.
  

Apply : You can apply for a balance transfer card online. Fill up the form with necessary and correct information. Submit the application form and wait to receive a confirmation of approval.

Transfer: It is better to approach the new credit card company and request a balance transfer. It is a simple process and can be done online or through a phone. Your new credit company will need to know how much of your balance you wish to transfer as well as the account numbers of your old cards. It typically takes seven to ten working days to process the transfer. Continue to make payments on your old cards till the new card company confirms a successful transfer.

Pay :Once the balance transfer is successful, all your old cards will be wiped clean and your entire debt will be transferred to your new card.

If you had a huge debt, transferring the entire amount might not be possible. In that scenario, you still need to make some payments on your old cards.

Try to pay off most of your balance within the introductory period when the APR is low. That's how you must utilize a balance transfer to your advantage - save money on interest and pay off debt faster.

How To Reduce Home Loan Interest Rate?

When you need to get a new home loan, you need to provide a number of documents. This differs, depending on the nature of your occupation. Salaried applicants have to provide salary slips as evidence of their financial ability to pay back the loan. Self-employed individuals need to provide banking details and ITR records. After taking the loan, you not only need to pay the principal amount in full, but also the interest and the MCLR.

Housing Loans and LAPs

There are two kinds of home loans: Housing loans and LAPs.

Housing loans are what we normally consider home loans. LAP, or Loan Against Property, is where a property is on the line when you wish to get a new loan. In the case of a housing loan, the collateral can be a sum of money, but in the case of LAPs, the collateral is always property. As you can understand, the amount of money is proportional to the property’s value.

Of course, the LAPs are riskier. In case one is unable to pay back a LAP home loan, the chances of recovering the property are not great.

The Home Buying Process - How to Reduce Home Loan EMI

So what happens when one wants to buy a new home with a loan?
Well, first you’ll need to search for the property you want, of course.
Second, you approach the seller of said property and express your desire to buy it.
However, since you do not have your own funds to buy the property with, you take a loan from a bank of your choice.
But here’s the catch! The bank does not transfer the funds to you. It transfers the funds directly to the seller. Surprise!
This is not a bad thing. In fact, it makes matters easier for you. The bank takes up the job of transferring the money, which you would have had to transfer anyways to the seller.

Here’s an example. Let’s say that you have spotted your dream home and asked the seller what its price is. They tell you that the property can be bought for Rs. 5 lakhs. Not having that much money, you approach a bank. The bank forwards the loan, but not to you. The loan is given to the property seller.

There’s another point to understand here. The property’s documents are not immediately transferred to the buyer. When the bank forwards the loan amount to the seller, he or she gives the property's documents to the bank. The bank keeps the documents and only gives it to the buyer when he or she repays the loan. In case the buyer is unable to repay the loan, the property belongs to the bank.
With such a loan, the buyer can purchase a plot, a plot plus a flat, apartment, etc.
One good news is that you can apply for a home loan at low EMIs. We’ll show you how soon.

From where does a bank gets it money?

Great question! Here’s how it works. Let’s say that you take a loan from HDFC bank. Banks normally have funds ready to disburse for loans. Where does this money come from? Banks can’t print their own money!
They get funds from HFCs or Housing Finance Corporations, which in turn get their funds from the NHB or the National Housing Bank. The NHB gets its money from the Central Bank of India. Money comes from the top to the bottom, but at each step, the bigger bank or organizations watch the ROI that is possible from the investment.
This is where Balance Transfer and BT Savings come in.
What are Balance Transfer Savings?

Here’s an easy example.
Let’s say that a person takes a home loan in 2016. It has an 11% interest rate and the amount of loan is Rs. 45 lakhs.
However, the person now gets a better offer from a second bank, which offers a lower interest rate. Thus, he decides to go to the second bank to get this advantage. It pays to have lowest interest rate on a home loan.

Additionally, as he has already paid a part of the loan in the first bank, he will only have to pay the remaining amount here.

Balance Transfer Your Home Loan at Lowest Interest Rate Through mymoneykarma

BT Savings are calculated in the back end by taking inputs from the customer. The information is conveyed in a note to the customer saying that a certain amount will be reduced in one's home loan EMI. Let's say that the home loan EMI is Rs. 23,000, After Balance transfer, the home loan EMI will be Rs. 21,000. Thus, the total savings for the customer would be Rs. 2000 per month. Therefore, per year, the total savings comes to Rs. 24,000.
mymoneykarma calculates your benefit beforehand and then requests the customer’s consent to go ahead with a balance transfer.
We then convey a list of documents to get started with the process, such as property documents and income documents.
Once this is done, we take the appointment date and time for the documents to be picked up.

Balance Transfer or Personal Loan - Which is Better?

When you are already in debt and looking to repay it with another loan, you need to be very careful so that you don't plummet into the vicious cycle of more and more debt. Personal loans and balance transfer cards might seem appealing, but they can be beguiling too. However, the biggest catch is deciding which one to go for. Here are few pointers that you must consider before you apply for either of them.

Type of Debt

The choice between a balance transfer card and a personal loan lies entirely on the types of debt that you have. In case you are planning on consolidating and paying off different types of debt, a personal loan might be the most flexible option for you. A personal loan brings a lump sum to your bank account. You are free to decide how you want to utilize it.

Balance transfer cards, on the other hand, are often restricted to a particular type of debt, usually credit card debts. However, some card issuing companies cannot do a balance transfer to their own credit cards. Moreover, a very few card issuing companies allow you to transfer other types of debts (like a student loan, mortgage or auto loan).

Rate of Interest

Personal loans barely offer zero interest promotional or introductory offers, but the interest rates might be lower than your credit card's APR. Alternatively, a balance transfer card could be your cheapest and most ideal option if you can repay the entire debt within the introductory period as most balance transfer cards offer a low or even no interest scheme for a limited period in the beginning.

However, if you take a balance transfer card but do not settle all your debt within the introductory period, you could end up paying a higher APR which might even be more than the APR of your old credit card.

Credit Score

When you apply for a new line of credit, the lender will make a hard inquiry, which will slightly bring down your credit score. This inquiry will stay in your report for a long time, but your credit score will recover within a year.

A personal loan will add variety to your accounts, which is good for your credit score. You won't get this advantage from a balance transfer credit card. On the other hand, a balance transfer card will add to your total credit limit and bring down your credit utilization rate, which will boost your credit score.

If you pay off outstanding balances in several credit cards and move the debt to a new loan or credit line, it will reduce your utilization rate and shoot up your credit score. However, closing these credit card accounts may negatively impact your credit score. It entirely depends upon how you handle the new loan or credit card. That being said, weigh the consequences before you make a choice.

Repayment

If you are accustomed to low credit card payments, you might face a problem in cash-flow as your monthly payment on a personal loan will most likely be higher than the minimum payment on a credit card.

But you might have to pay more than the minimum in case you plan on repaying the card's balance before the promotional period gets over. You should carefully calculate your monthly payoffs in order to be able to repay the whole amount within the promotional period. Confused? Try using a debt repayment calculator for further clarity.

Home Loan Transfer - Problems Faced in Home Loan Transfer

Getting a Balance Transfer of BT can be quite lucrative. It may seem to you that the grass is greener on the other side, or that there are many, many benefits waiting for you after getting the Balance Transfer. Banks do offer lower interest rates in BTs, but there are still charges and procedure to be aware of.

If you are not satisfied with the loan you have, or if you are finding it hard to repay it back, or if you just want to bring down the interest rate, a Balance Transfer is the best solution. This is your Plan B, if the first loan is not working. Maybe you have seen that the first bank is not giving good service and just want to switch to another one, or maybe you want to renegotiate the terms of the loan but your bank doesn’t want to hear anything about it. The reason can be anything, but at the end of the day, you know a Balance Transfer can help you in all of these circumstances.

Why did Balance Transfers Start?

Earlier, banks did not want to reconsider the interest rates or repayment terms and durations. After all, from the point of the banks and lenders, if customers were allowed lower interest rates suddenly, the banks themselves will lose out. Since customers would save more in case of lower interest, they’d repay faster, and that the banks were not ready to allow.

However, as we shall see below, Balance Transfers come with their own slew of problems.

The process

There are some things in the process itself which you need to be aware of. To even begin the process, you need to get an NOC letter from your current lender, along with a letter from them telling your new bank the outstanding amount of the loan. These are to be submitted to the new back.

Now the process begins. Your new bank, to which you are transferring the loan, shall treat it as a new loan. This means you’ll have to do the documentation process all over again. For this, you’ll have to submit documents like photo IDs, salary slips, employer’s letter, bank statements, among others. If you are transferring a home loan, you need coordination and follow-ups. You also need to pay all the fees and charges again!

Problems crop up when a co-applicant of the loan is retired, or when your income level has decreased. In this case, the bank can deny you the service. They can also deny you the BT if you were not paying your EMIs regularly.

Now, if the bank is satisfied with everything, they shall sanction the amount.

Balance Transfer or Personal Loan - Which is Better?

Type of Debt

The choice between a balance transfer card and a personal loan lies entirely on the types of debt that you have. In case you are planning on consolidating and paying off different types of debt, a personal loan might be the most flexible option for you. A personal loan brings a lump sum to your bank account. You are free to decide how you want to utilize it.

Balance transfer cards, on the other hand, are often restricted to a particular type of debt, usually credit card debts. However, some card issuing companies cannot do a balance transfer to their own credit cards. Moreover, a very few card issuing companies allow you to transfer other types of debts (like a student loan, mortgage or auto loan).
Rate of Interest

Personal loans barely offer zero interest promotional or introductory offers, but the interest rates might be lower than your credit card's APR. Alternatively, a balance transfer card could be your cheapest and most ideal option if you can repay the entire debt within the introductory period as most balance transfer cards offer a low or even no interest scheme for a limited period in the beginning.

However, if you take a balance transfer card but do not settle all your debt within the introductory period, you could end up paying a higher APR which might even be more than the APR of your old credit card.
Credit Score

When you apply for a new line of credit, the lender will make a hard inquiry, which will slightly bring down your credit score. This inquiry will stay in your report for a long time, but your credit score will recover within a year.

A personal loan will add variety to your accounts, which is good for your credit score. You won't get this advantage from a balance transfer credit card. On the other hand, a balance transfer card will add to your total credit limit and bring down your credit utilization rate, which will boost your credit score.

If you pay off outstanding balances in several credit cards and move the debt to a new loan or credit line, it will reduce your utilization rate and shoot up your credit score. However, closing these credit card accounts may negatively impact your credit score. It entirely depends upon how you handle the new loan or credit card. That being said, weigh the consequences before you make a choice.
Repayment

If you are accustomed to low credit card payments, you might face a problem in cash-flow as your monthly payment on a personal loan will most likely be higher than the minimum payment on a credit card.

But you might have to pay more than the minimum in case you plan on repaying the card's balance before the promotional period gets over. You should carefully calculate your monthly payoffs in order to be able to repay the whole amount within the promotional period. Confused? Try using a debt repayment calculator for further clarity.