While availing of a Home Loan, homebuyers often look for lenders who understand their financial standing and offer customised loans basis their eligibility. For borrowers who are looking to manage their Home Loan efficiently, applying for a Home Loan Balance Transfer can be a strategic move.
Even those servicing a housing loan try to avail of competitive deals by negotiating favourable terms with their current lender or opting for a Home Loan Balance Transfer with another lender who offers them better interest rates. However, like every other loan, there are several pros and cons of Home Loan Balance Transfer that necessitate a wider understanding of some of its key elements.
Pros of Home Loan Balance Transfer
Detailed below are some of the benefits of a Home Loan Balance Transfer:
Reduced Interest Rates
One of the chief reasons for switching lenders is to avail the benefits of a lower Home Loan interest rate. Loan rates single-handedly influence the cost of your Home Loan. Therefore, securing a modest interest can considerably cut down your debt, in addition to fetching you suitable terms and services.
Also Read: Five Ways to Reduce Your Home Loan Burden
Enhanced Credit Score
A balance transfer can aid in improving your credit score. Maintaining a high credit score is vital to receiving attractive interest rates and credit deals.
Cost-Effective Loans
The primary objective of a loan shift is to save funds. Reduced interest rates make it easier to repay the loan. It enables you to budget proactively as well as plan for pre-payments to decrease the interest outgo and close the loan sooner.
Cons of Home Loan Balance Transfer
Now let us consider the various disadvantages of a Home Loan Balance Transfer:
Tricky Terms and Conditions
Even if you snap up the best transfer deal in the market, go through the terms and conditions carefully to avoid any unforeseen financial quandary in the future.
Loan Approval Process
When you apply for a balance transfer, it is very similar to undergoing the Home Loan approval process once again as it involves legal verification of the documents, credit appraisal and so on. A loan switch requires you to fulfil the lender’s eligibility criteria and there are possibilities of rejection if you don’t measure up to these parameters.
Read Also: Loan Disbursement and Sanctioning Process
Additional Fees and Charges
There are several charges and fees associated with a balance transfer. If one isn’t cautious, these costs may add up to make your transfer option an expensive proposition. So, compute these charges while calculating the costs of a loan shift to assess its viability.
What is a Home Loan Transfer to Another Person?
Just as lenders allow borrowers to switch their existing Home Loans to another lender based on specific terms and conditions, they also provide a facility for transferring a loan balance from one individual to another. While servicing an ongoing Home Loan, if you wish to sell off the property against which you have secured the loan, and a buyer seeks to avail of a Home Loan from the same lender, an internal balance transfer takes place from one person to another.
Here, the applicants change while the lender remains the same. The owner sells the property to the buyer with a subsequent transfer of ownership rights; and closes the loan with the money obtained through the sale.
How to Transfer a Home Loan to Another Person?
A Home Loan transfer has certain pre-conditions. Usually, while transferring a Home Loan to another buyer, borrowers have to follow this process:
- Firstly, the existing loan borrower must furnish a letter requesting loan foreclosure against the sale of the property.
- If another individual wants to purchase it, they may apply for a housing loan with a duly filled application form and the applicable processing fees.
- The buyer has to submit KYC documents and income proof to the lender. The property will undergo a legal and technical evaluation to determine its current value since the process involves ownership transfer. A No Objection Certificate from the developer or authority is also necessary in this case.
- The lender issues a cheque to the seller/owner after the ongoing Home Loan is closed with the proceeds of the newly sanctioned loan.
- Then, the seller hands over copies of the property-related documents to the buyer, while the original ones remain in the lender’s custody until complete loan repayment.
To Conclude
A balance transfer can reap maximum benefits in the initial years of the loan tenor provided you get the ideal tenor and interest rate. Thus, if you are given a longer tenor with lower EMIs, your interest payouts will increase considerably, raising the credit cost. Moreover, if you have already repaid a large chunk of your EMIs, it is best to continue with the current lender, as a loan switch may not fetch you any gains at this stage.
It is always advisable to negotiate the rates with your present lender first and try to avail of a better deal. This will save you ample time and energy. But if you cannot come to an agreement, a loan shift could be the best alternative. Remember, you may have to bear a penalty for seeking a transfer. Some lenders waive off this amount while others might impose a partial waiver. Also, a Home Loan Balance Transfer Calculator enables you to gauge and compare the various loan transfer schemes in the market so that you can select the one per your preference.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Content with tag .
Trending Articles
home+loan Home Loan
[N][T][T][N][T]
Common Mistakes to Avoid When Applying for a Home Loan2023-12-04 | 2 min
home+loan Home Loan
[N][T][T][N][T]
Common Myths About Home Loans: All You Need to Know2024-04-08 | 5 min
home+loan Home Loan
[N][T][T][N][T]
7 Common Problems You May Face While Applying For Home Loan2024-01-18 | 7 min
home+loan Home Loan
[N][T][T][N][T]
What is the Difference Between Top-up Loan and Home Improvement Loan2023-01-11 | 5 min
home+loan Home Loan
[N][T][T][N][T]
6 Point Differentiation Between Home Loan Vs Home Construction Loan2023-02-15 | 6 min
home+loan Home Loan
[N][T][T][N][T]
What is Foreclosing a Home Loan? These are Some of the Do’s and Don’ts2023-12-20 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Benefits of Submitting a Digital Home Loan Application in Current Times2023-12-20 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Best Credit Score for Home Loans & How to Improve Yours2023-08-31 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Get Your Down Payment Funds Ready with These 5 Easy Steps2023-03-20 | 5 min
home+loan Home Loan
[N][T][T][N][T]
What Happens If Home Loan EMI Bounces? Know the Consequences2024-07-11 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Would it be Possible for Me to Apply for a Second Mortgage?2024-05-22 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Advantages of Including a Co-Applicant on Your Home Loan2024-01-21 | 7 min
home+loan Home Loan
[N][T][T][N][T]
A Complete Guide on the Benefits of Joint Home Loan2022-11-16 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan Balance Transfer: Benefits, Eligibility, and More2024-05-15 | 3 Min
home+loan Home Loan
[N][T][T][N][T]
Can I Take a Home Loan and a Personal Loan Together?2024-01-17 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Advantages for First-Time Home Buyers2023-07-14 | 4 min
home+loan Home Loan
[N][T][T][N][T]
An Essential Guide to Refinancing a Home Loan2024-04-22 | 5 Min
home+loan Home Loan
[N][T][T][N][T]
All About Home Loan Balance Transfers2024-06-04 | 4 mins
home+loan Home Loan
[N][T][T][N][T]
All You Need to Know About Home Loans2023-01-19 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Should I Apply for a Pre-Approved Home Loan or an After Property Finalisation Loan?2024-03-15 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Are Registration Charges Compulsory When You Opt for a Home Loan?2024-04-15 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How to Connect with Bajaj Housing Customer Care2023-06-27 | 5 Min
home+loan Home Loan
[N][T][T][N][T]
Difference Between Bank Rate and Repo Rate2023-09-22 | 5 min
home+loan Home Loan
[N][T][T][N][T]
6 Ways to Reduce Your Home Loan Interest2024-03-20 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Factors to Consider Before Applying for a Home Construction Loan2022-12-02 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Benefits of a Home Loan2023-02-20 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Factors Determining Your Home Loan Eligibility2024-03-13 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan Burden Management: Five Tips2022-06-27 | 3 min
home+loan Home Loan
[N][T][T][N][T]
How to Pay Off Your Home Loan Quicker2024-03-11 | 4 Min
home+loan Home Loan
[N][T][T][N][T]
Section 80EE: Claim Deductions on the Home Loan Interest Paid2024-04-25 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Smart Things to Consider Before You Apply for a Home Loan2022-12-14 | 5 min
home+loan Home Loan
[N][T][T][N][T]
What Factors Decide Your Home Loan Interest Rates?2024-05-29 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Reasons Why a Housing Loan Application May Be Rejected2024-02-14 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Types of Home Loan Charges2024-01-22 | 3 Min
home+loan Home Loan
[N][T][T][N][T]
Should You Take a Home Loan Even If You Have Enough Money to Buy a House?2024-01-30 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan EMI Calculator Benefits and It’s Features2024-02-21 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Understanding Loan-to-Value Ratio (LTV) and its Calculation2023-11-28 | 4 Min
home+loan Home Loan
[N][T][T][N][T]
Difference Between Home Loan and Personal Loan: Which is better?2024-03-04 | 4 min
home+loan Home Loan
[N][T][T][N][T]
What Is Home Loan Eligibility and How Is It Calculated2024-07-11 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Everything You Need to Know About Top-up Loans on a Home Loan2024-04-09 | 6 min
home+loan Home Loan
[N][T][T][N][T]
How to Get a Better Interest Rate on Your Home Loan2024-01-04 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Get a Home Loan Without Visiting Branch: A Step-by-Step Guide2024-03-20 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Complete Guide to Securing a Attractive Interest on Home Loans2024-01-23 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan Refinancing: What, Why, and Things to Remember2024-06-17 | 5 Min
home+loan Home Loan
[N][T][T][N][T]
5 Great Ways Women Can Benefit from Taking a Housing Loan2024-01-16 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How to Get a Housing Loan Approved Instantly?2024-04-10 | 5 min
home+loan Home Loan
[N][T][T][N][T]
What Is a Pre-Approved Home Loan and How Should You Get It Done?2024-03-12 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Consider These Factors Before Foreclosing Your Home Loan2024-04-16 | 3 min
home+loan Home Loan
[N][T][T][N][T]
What Affects the Interest Rate on Your Home Loan2024-03-13 | 5 min
home+loan Home Loan
[N][T][T][N][T]
10 Smart Steps for Effective Home Loan Management2024-02-16 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How to Determine Your Ideal Credit Score for a Home Loan?2024-03-28 | 4 min
home+loan Home Loan
[N][T][T][N][T]
What is an NOC Letter and Why is it Important?2024-05-14 | 3 min
home+loan Home Loan
[N][T][T][N][T]
5 Tips for Lowering Home Loan Interest Rates in 20232024-03-19 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How Can Your Credit Score Impact Your Home Loan Interest Rate?2024-02-13 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Differences Between Fixed and Floating Interest Rates2024-05-15 | 2 min
home+loan Home Loan
[N][T][T][N][T]
ITR Filing for Home Loan – Know the Right Process to File Your Income Tax Returns2024-02-16 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan Terminologies2024-06-01 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Ways to Check Bajaj Housing Loan Account Numbers2024-04-05 | 3 min
home+loan Home Loan
[N][T][T][N][T]
What Do You Need to Know About Home Loan Foreclosure?2023-03-23 | 5 min
home+loan Home Loan
[N][T][T][N][T]
What is the Process to Get Your Home Loan Approved Fast with Bajaj Housing Finance?2024-02-15 | 6 min
home+loan Home Loan
[N][T][T][N][T]
What are the Different Types of Loans Available in India?2024-01-02 | 5 Min
home+loan Home Loan
[N][T][T][N][T]
Top 5 Home Loan Benefits for First-time Woman Buyers2024-05-14 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Importance of an NOC Letter after Closing Your Home Loan2023-12-14 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Benefits of a Joint Home Loan with your Spouse2023-08-04 | 4 min
home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenor that Suits Your Budget2023-06-29 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How Digital Platforms Are Revolutionising the Face of Housing Finance2023-12-21 | 7 min
home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Down Payment for a Home Loan?2024-05-16 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Know All About the Home Loan Foreclosure Procedure2023-12-20 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Hybrid Flexi Loan vs. Personal Loan: Which One is Better?2024-01-24 | 3 min
home+loan Home Loan
[N][T][T][N][T]
10 Factors That Affect Your Home Loan Eligibility2024-05-21 | 7 min
home+loan Home Loan
[N][T][T][N][T]
Understanding Stamp Duty and Property Registration Charges2024-03-13 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How to Access Your Login Details in Bajaj Customer Portal?2024-02-02 | 5 min
home+loan Home Loan
[N][T][T][N][T]
How to Calculate Home Loan EMIs2022-06-14 | 5 Mins
home+loan Home Loan
[N][T][T][N][T]
Making Financial Planning Easy with a Home Loan EMI Calculator2023-09-06 | 2 min
home+loan Home Loan
[N][T][T][N][T]
All You Should Know About Home Loan Disbursement and Sanctioning Process2024-03-19 | 3 Min
home+loan Home Loan
[N][T][T][N][T]
Difference Between Co-owner, Co-borrower, Co-Applicant, and Co-Signer in Home Loan2023-08-31 | 6 min
home+loan Home Loan
[N][T][T][N][T]
How Do You Overcome Home Loan Repayment Burden?2023-02-13 | 2 min
home+loan Home Loan
[N][T][T][N][T]
Home Loan vs Loan Against Property: A Complete Comparison2023-11-29 | 4 min
home+loan Home Loan
[N][T][T][N][T]
A Complete Guide for Home Loan Insurance2023-04-03 | 4 min
home+loan Home Loan
[N][T][T][N][T]
How to Check Your Bajaj Housing Finance Home Loan Status2022-06-22 | 4 Min
home+loan Home Loan
[N][T][T][N][T]
Is It Mandatory to Take Insurance with a Home Loan?2023-08-01 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Secured vs Unsecured Loan - Know the Difference2023-08-24 | 2 min
home+loan Home Loan
[N][T][T][N][T]
How to Choose the Best Home Loan?2023-08-09 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Increase or Decrease Effects of Repo Rate2023-08-29 | 7 min
home+loan Home Loan
[N][T][T][N][T]
Understanding the Benefits of a Home Loan EMI Calculator2023-07-12 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Tips to Avoid Rejection of Your Home Loan Application2023-08-01 | 3 min
home+loan Home Loan
[N][T][T][N][T]
Check Housing Loan Eligibility with Home Loan Eligibility Calculator2023-07-12 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Tips to Get Home Loan with Minimum Down Payment in India2023-07-11 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Differences Between Repo Rate and Monetary Policy Tools2023-07-28 | 5 min
home+loan Home Loan
[N][T][T][N][T]
What Happens to a Home Loan in the Case of the Borrower's Death?2023-04-17 | 4 min
home+loan Home Loan
[N][T][T][N][T]
Taking a Home Loan to Buy a Property for Investment? Here Are 5 Points to Consider2023-04-17 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Know All About the HRA Benefit on Payment of House Rent2023-04-03 | 6 min
home+loan Home Loan
[N][T][T][N][T]
A Guide to Statutory Liquidity Ratio2023-02-22 | 5 min
home+loan Home Loan
[N][T][T][N][T]
5 Strategies to Manage High Home Loan EMIs Effectively2023-02-22 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Why Is Credit Score Important for Home Loan Lenders?2023-03-21 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Importance Of a Good Credit Score in The Home Loan Process2023-03-20 | 4 min
home+loan Home Loan
[N][T][T][N][T]
4 Key Benefits of Home Loan Balance Transfer to Bajaj Housing Finance Limited2023-01-09 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Five Important Factors to Keep in Mind When Prepaying Your Home Loan2023-01-17 | 6 min
home+loan Home Loan
[N][T][T][N][T]
A Step-by-Step Guide to Home Loan Balance Transfer Application2022-12-20 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Factors to Consider Before Opting for Home Loan Balance Transfer2022-12-14 | 5 min
home+loan Home Loan
[N][T][T][N][T]
Top Things to Keep Track of While Doing a Home Loan Balance Transfer2022-12-18 | 7 min
home+loan Home Loan
[N][T][T][N][T]
Which is the Best Option: Land Purchase Loan or Home Loan?2023-02-01 | 6 min
home+loan Home Loan
[N][T][T][N][T]
Why Should You Choose a Balance Transfer on Your Home Loan?2023-02-01 | 4 min
home+loan Home Loan
[N][T][T][N][T]
The Importance of a Home Loan NOC2023-01-31 | 7 min
home+loan Home Loan
[N][T][T][N][T]
Five Tips to Choose the Right Digital Platform for Home Loans2023-02-09 | 3 min
home+loan Home Loan
[N][T][T]Types[S]of[S]Home[S]Loans[S]Available[S]in[S]India[N][T]
Types of Home Loans Available in India2022-06-28 | 5 Min
home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenor that Suits Your Budget