Selecting a long-term financial commitment requires thorough research. And a home loan is one such financial commitment, so before finalizing a lending institution, know their terms. Being unaware of interest regimes, home loan processing fees, or other crucial factors can impact home loans and might result in expensive financing options.
The current rising interest rate regime in the economy has led many banks and housing finance institutions to increase their lending rates. Many borrowers are considering the home loan balance transfer as a solution.
About Home Loan Balance Transfer
A Home Loan Balance Transfer is the process of transferring the outstanding amount of a home loan to another lender. The new lender pays the current lender the principal balance.
Individuals can transfer home loans if they have paid a minimum of twelve EMIs (Equated Monthly Instalments). Since the new lender is opening a new home loan account, the lender will reassess the applicant’s eligibility.
Why Borrowers Choose Home Loan Balance Transfer
Key reasons that make borrowers consider home loan balance transfer include the following:
- Reduced interest cost with lower interest rates: The primary aim of choosing a home loan balance transfer process is reducing debt obligation with reduced interest cost. It helps individuals who have made a hasty decision in their home loan application.
- Avail of an extended tenure: Borrowers transfer their loans to decrease their EMIs and reduce the burden. Usually, you should prefer a lender offering home loans with a long tenure. It can be up to 20 years with leading banks.
- For Better Services: Home loan transfer is also a preferred option for borrowers unsatisfied with their existing lender’s service(s).
- Additional Funds without End-use Restrictions: Individuals who need the additional amount to meet their financial obligations may also consider a home loan transfer. Getting an additional amount (top-up loan) is easy with a home loan transfer.
The Process of Home Loan Balance Transfer
The application process is hassle-free and requires minimal documentation. Just follow these easy steps and complete the process:
Check the Eligibility
- Salaried individuals should be between 18-60 years, and self-employed individuals should be between 18-65.
- The minimum salary should be Rs. 20,000 per month for Delhi, Bangalore, Chennai, Pune and Mumbai residents. This limit is Rs. 15,000 for other cities.
Fill in the Application Form Online
Access the application form and fill out the required personal, professional, financial, and existing property details.
Also Read: How Can a Home Loan EMI Calculator Help You Plan Your Finances Better?
Documentation
After filling in the details required in the application form, the lender may ask applicants for the necessary documents, which include the following:
- Salaried employees need to submit ID Proof, Address Proof, Income Proof, Education Proof, and Salary slips with Income tax return (ITR) acknowledgments.
- Self-employed persons need to submit Identity Proof, Residence Proof, education proof, and Income statements (ITR, Balance Sheet, etc.).
- Borrowers need to submit the NOC (no objection certificate) received from the current lender.
Go through the home transfer loan offer
Based on the details submitted, the lender will give the borrower an offer. Go through it and opt for it only if it meets your expectations.
Pay Security Fee Online
There will be minimal security pay for loan transfer processing. Pay it online to the lender.
