How a Home Loan Balance Transfer Works?

What is a Home Loan Balance Transfer?

A Home Loan Balance Transfer is the easiest way to possibly avail of a lower interest rate, thereby saving more over the course of your tenure and managing your EMIs more comfortably. Opting for a Home Loan Balance Transfer is a smart way to get a reduced interest rate.

A Home Loan Balance Transfer is a financial facility that lets you enjoy an attractive interest rate and other benefits by requesting a transfer of your Home Loan balance amount to a new lender at a reduced cost. Your new lender pays the loan on your behalf, and you repay the loan amount with the added benefit of availing of a Top-up Loan, basis eligibility. 

Before you decide to transfer your Home Loan balance, you should have all the necessary information at your disposal to make an informed decision and do what’s best for your financial health.

How Does a Housing Loan Balance Transfer Work?

Thinking of switching to a new lender? Here’s how a Home Loan Balance Transfer typically works:

• Once a borrower decides to shift their loan to another lender, the first thing they should do is inform their current lender of their decision.  
• Then, your current lender will review the application and provide a no-objection certificate.  
• After that, you will have to submit this NOC letter and your Home Loan transfer application to your new lender. The new lender will then require documents to process your application. These documents may include KYC documents, property-related documents, proof of income (salary slips, Form 16, and ITR), business continuity proofs, etc. Then, your new lender will approve your application and open your loan account with them. 
• Upon approval, the new lender will pay off the outstanding loan amount to your old lender so that your previous loan account can be closed. Here the borrower will be required to pay a Home Loan Balance Transfer fee.  
• Once this is done, you can start your loan journey afresh and start paying your Home Loan EMIs to your new lender. 

Features of a Home Loan Balance Transfer

Below are the features of a Home Loan Balance Transfer:

• It lets you shift your Home Loan balance to a new lender who offers better loan terms and benefits.
• You also stand to benefit from a sizeable Top-up Loan, which helps you meet housing expenses. 

Additional Read: Things You Need to Know Before Foreclosing Your Home Loan

Benefits of a Home Loan Balance Transfer

With attractive interest rates, a Home Loan Balance Transfer offers:

• Lower Home Loan EMIs
• A sizeable Top-up Loan
• A flexible repayment tenure
• No part-prepayment and foreclosure charges (This is valid for individual borrowers with floating interest rate Home Loans. It may change for individuals and non-individual borrowers who have availed of loans for business purposes.)

Eligibility Criteria for a Home Loan Balance Transfer

To apply for a Home Loan Balance Transfer with Bajaj Housing Finance, you need to fulfil the eligibility criteria given below: 

• If you are a salaried applicant, you should be between 23 and 62 years** of age.
• A self-employed applicant must be within the age range of 23 to 70 years**.
• A salaried applicant must show a minimum of 3 years of working experience in a public or private sector company or an MNC.
• If you are a self-employed applicant, you should show a business vintage of at least 3 years. 
• If you are a salaried applicant, you must be an Indian citizen (NRIs included).
• If you are a self-employed applicant, you must be an Indian citizen (residents only).

**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.

Additionally, some lenders may ask you to show a record of timely EMI payments on your Home Loan to date. It is a good idea to ensure that you have a strong credit score before applying for a Home Loan Balance Transfer.

How to Calculate Savings on a Home Loan Balance Transfer?

Borrowers can use the Bajaj Housing Finance Home Loan Balance Transfer Calculator to efficiently calculate the savings they stand to make if they switch their lenders. Here’s how to use it: 

1. Select your existing Home Loan lender.
2. Select your property location.
3. Select the start date of your Home Loan.
4. Use the slider to select your Home Loan disbursal amount.
5. Use the next slider to select your repayment tenure.
6. Select your current interest rate next.
7. Use the last slider to select the new Home Loan interest rate that is offered to you.

The loan window calculates the savings you can make if you transfer your balance on the same terms and your Top-up Loan eligibility. 

Also Read: Reasons to Opt for Home Loan Refinancing 

How to Apply for a Home Loan Balance Transfer?

Here is a step-by-step breakdown of the Bajaj Housing Finance Home Loan Balance Transfer application process to guide you:

1. Visit the Home Loan application form.
2. Select your employment type and your Home Loan type.
3. Provide your PIN code, mobile number, required loan amount, and net monthly income. 
4. Select your current Home Loan lender, the start date of your loan, the sanctioned loan amount, and the monthly obligation.
5. Submit your Home Loan Balance Transfer application successfully.

Once you submit the form, a Bajaj Housing Finance representative will be in touch with you shortly.

*Terms and conditions apply.

Additional Link: Can I Apply for a Second Home Loan?