What is a Home Loan Balance Transfer?
Home Loan Balance Transfer refers to the process of transferring an existing Home Loan from the current lender to another lender. Most borrowers opt for this facility when a new lender offers them lower interest rates and better loan terms and conditions than that being offered by the current lender.
What is the Home Loan Transfer Process?
The following are the steps involved in the balance transfer process:
- Inform the Current Lender: 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. One can do this by either writing a letter or submitting a Home Loan Balance Transfer form.
- Receive NOC: Your current lender will then assess the application and release a consent letter or No Objection Certificate.
- Submitting the Documents to the New Lender: Submit this NOC to your new lender along with your Home Loan transfer application and the documents your new lender will require to process your application. Your new lender will then approve your application and open your loan account with them.
- Transfer of Loan Account: The new lender will transfer the outstanding loan amount to your old lender so that your previous loan account can be closed. At this step of the process, you 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.
What are the Benefits of a Home Loan Balance Transfer?
Reduced Interest Rates and Higher Savings
Most people opt for a Home Loan Balance Transfer when another lender offers them lower interest rates, which in turn, leads to saving a considerable amount of money in terms of the total interest outgo over the length of the loan.
Top-up Loan
When borrowers opt for a Home Loan Balance Transfer, most lenders give borrowers the option of availing of a Top-up Loan . This Top-up Loan is sizeable, often going up to Rs.1 Crore* or even higher, basis the applicant’s eligibility.
Better Service and Facilities
Sometimes borrowers opt for a Home Loan balance for better loan management and service. When you opt for a Home Loan Balance Transfer, you can choose to go with a lender known for better service.
If you are unhappy with your current lender or with the interest rate that you are charged on your Home Loan, opt for a Home Loan Balance Transfer.
*Terms and conditions apply.
