Loan Info

Home Loan Balance Transfer

Home Loan Balance Transfer

Home Loan Balance Transfer is a facility that allows you to reduce your EMI or interest rate by transferring your outstanding loan from one lender to another. This facility lets you take advantage of lower interest rates available in the market.

So when should you take this facility? You should consider taking the balance transfer facility when your existing lender is charging a higher interest rate in comparison to what other lenders are ready to offer you.

Key Highlights of Home Loan Balance Transfer Facility

This facility allows you to move your outstanding loan balance from one bank to another.
There is usually a processing fee of upto 1% of the transferred loan amount, payable to the new bank.
Borrowers mostly take this facility to take advantage of lower interest rates available in the market.
Before you take this facility, make sure your home loan agreement with the existing lender allows balance transfer.

Why Apply for Home Loan Balance Transfer?

The main reason for taking Home loan balance transfer is interest savings. By taking balance transfer, you can move your outstanding loan to another lender who is offering lower interest rates. Of course, you must compare the costs and benefits before taking this facility.

Home Loan Balance Transfer Process

Take the following steps if you wish to avail home loan balance transfer facility:

Check your existing home loan agreement and make sure it allows balance transfer.
Shortlist a new bank that is ready to offer you a lower interest rate.
Compare the cost of balance transfer with expected interest savings from loan transfer.
Get a letter of consent from your existing lender along with documents specifying the outstanding loan balance.
Submit these documents along with all other required documents to the new lender.
Once your new lender approves the loan, they will make payment towards your old loan and close it.
The new lender acquires your property documents from the old lender.

Eligibility Criteria for Home Loan Balance Transfer

The eligibility criteria may vary across lenders, but here are some of the most common requirements:

List of Documents for Home Loan Balance Transfer

When you apply for balance transfer, it’s almost like applying for a new loan. Therefore, you might have to submit all the documents that you may have submitted with the old lender. Take a look at some of the key documents required to apply for balance transfer:

Completed application form for balance transfer of home loan
Applicant's latest passport-size photographs
Address proof (Aadhar Card, Voter ID, Driving license, Passport, etc.)
Age proof (Birth certificate, 10th marksheet, Driving license, PAN, Voter ID, etc.)
Identity proof
Income proof (Bank statements, salary slips, Form-16, IT returns, etc.)
Documents related to existing loan including a letter of consent