Can Refinancing Your Home Loan Help You Save Money? Everything You Need to Know

A Home Loan is a long-term commitment that may span several years. If you are servicing a Home Loan and would like to benefit from a reduced interest rate, you can consider refinancing your Home Loan. In this case, you can opt for a Home Loan Balance Transfer. Wondering whether it is the right time to reassess your loan? This guide will help you understand the benefits of refinancing a Home Loan and how to go about it. 

What is Home Loan Refinancing?

Home Loan refinancing, also known as Home Loan Balance Transfer, involves transferring your existing loan from your current lender to a new one offering better terms. Borrowers usually refinance their Home Loans to reduce interest rates, adjust the loan tenures, or avail of Top-up Loans. 

Why Consider Refinancing Your Home Loan?

There are multiple compelling reasons to refinance your Home Loan: 

• Lower Interest Rates: Secure a reduced rate of interest to decrease your EMI obligation 
• Improved Loan Terms: Modify the repayment tenure to suit your current financial standing 
• Better Features: Opt for additional loan features like flexible repayment options 
• Top-up Loan Facility: Get access to additional funds without applying for a new loan 
• Better Loan Management: Opt for a lender offering better customer support and digital services 

When Should You Refinance Your Home Loan?

You may want to consider refinancing under the following conditions: 

• You are paying a higher interest rate and want to secure a lower rate 
• You want to access better loan management services. 
• You want to opt for a flexible repayment option. 

Eligibility Criteria for a Home Loan Balance Transfer 

To transfer your existing Home Loan balance to Bajaj Housing Finance, you must meet the following eligibility criteria: 

For Salaried Individuals:

• Must be an Indian citizen (NRIs are also eligible) 
• Age between 23 and 62 years** 
• Minimum 3 years of work experience in a public or private company, or an MNC 

For Self-Employed Individuals: 

• Must be an Indian resident 
• Age between 23 and 70 years** 
• Should have a steady income from a business with a vintage of at least 3 years 

**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit for applicants is subject to change, depending on the property profile. 

Documents Required for Home Loan Refinancing

Here is an indicative list of documents needed: 

• PAN Card or Form 60 (mandatory) 
• Aadhaar or Voter ID for identity and address proof 
• Property documents 
• Salary slips/Form 16 (for salaried individuals) 
• ITR and financial statements (for self-employed individuals) 
• Loan account statement from your existing lender 
• Bank statements of the last 6 months 

Use the Home Loan Balance Transfer Calculator 

A Home Loan Balance Transfer Calculator by Bajaj Housing Finance is an online tool that helps you determine how much you could save by transferring your existing Home Loan to us.  

To use our Home Loan Balance Transfer Calculator, follow the steps given below: 

1. Choose your current lender from the dropdown list. 
2. Select the location of your property from the available options. 
3. Provide the sanction date of your existing home loan. 
4. Input or adjust the loan amount, interest rate, and tenure.  
5. Lastly, enter the current interest rate. 

You will be able to see the total amount saved with a balance transfer, along with the total Home Loan amount and the Top-up Loan amount.  

Step-by-Step Guide to the Home Loan Balance Transfer Process

The following steps will help you navigate the balance transfer process easily:  

1. Compare Lenders and Their Offers

Start by comparing various lenders to identify who offers the most favourable terms and benefits for a Home Loan Balance Transfer. 

2. Try to Renegotiate with Your Current Lender

Before switching, consider negotiating with your current lender for a lower interest rate. This way, you could avoid balance transfer charges and enjoy better EMIs without changing lenders. 

3. Request a No-Objection Certificate (NOC)

If you choose to proceed with a Home Loan Balance Transfer, inform your existing lender. They will issue a No-Objection Certificate (NOC) upon receiving your request. 

4. Submit the NOC to the New Lender 

Provide the NOC along with the necessary documents to your new lender to initiate the loan transfer process. 

5. Close Your Existing Loan Account

After the new lender approves your application, they will disburse the outstanding loan amount to your previous lender, who will then close your old loan account. 

Refinancing a Home Loan can be a smart financial decision if it aligns with your long-term goals. It can lower your interest outgo, provide more flexible terms, and even offer extra funds through a Top-up Loan. However, it is important to calculate all costs involved and ensure that refinancing truly benefits you.