Home loan transfer is a facility offered by several lending institutions and allows borrowers to transfer their home loan balance to another lender. If you have an existing housing loan, you can apply for this facility. It enables a transfer of the remaining amount to a different lender for a lower interest rate.
Benefits of balance transfer facility on housing loan –
The benefits of choosing a home loan balance transfer are listed below –
Lower rate of interest
The primary reason why borrowers apply for a home loan transfer is to avail comparatively lower rates of interest. Lower interest accrual helps reduce the EMIs to be paid and eventually the total cost of the loan.
Avail low prepayment charges
Individuals who apply for a home loan transfer can enjoy part-prepayment and foreclosure facilities at negligible charges. After paying the first EMI, beneficiaries can make a part-prepayment of an amount whose value is greater than or equal to that of 3 EMIs.
With the availability of lump-sum amount, they can also proceed to foreclose the loan account and save big on interest payment.
Avail top up loans
With the top up loan feature of the balance transfer facility, customers can borrow up to Rs. 50 Lakh over and above the housing loan balance. The amount comes with no restriction to end-use, thus allowing candidates to avail external finance to meet other big-ticket spending requirements.
Applying for a balance transfer facility in the initial years of loan tenor is more profitable as you can enjoy the lower rate of interest for a longer period. Hence, opting for a home loan balance transfer will help you save money.
Eligibility criteria for a housing loan balance transfer –
Interested candidates can avail the benefits of a home loan transfer once they meet the following eligibility criteria.
- Candidates’ age must be between 23 to 65 years.
- Applicant must pay 12 EMIs before the application.
- The borrower should not have any outstanding dues on the existing housing loan.
- The property should be already occupied or ready to move in.
Documents required for a housing loan balance transfer
Salaried and self-employed individuals are required to submit documents of identity proof, address proof and those related to their existing home loan. In addition to this, they are required to submit the following documents that are different for the two categories –
- For salaried employees
- Last three month’s salary slips.
- Bank statements for the last six months’.
- For self-employed individuals
- Last three years’ Income Tax Returns.
- Bank statements for the last six months.
- Balance sheet and profit and loss account statements for the last three years.
How to apply for a balance transfer facility on home loans?
- Step 1: Visit the official website of the lender you want to apply for a home loan transfer with.
- Step 2: Enter your personal and financial details in the given fields.
- Step 3: Submit details regarding your existing property.
- Step 4: Select the offer for a balance transfer on loan which applies to you.
- Step 5: Pay the security fee via a suitable online payment method.
- Step 6: Upload the required documents.
Once you have completed the application procedure, expect a verification followed by approval of your application for a balance transfer.
A majority of lending institutions, including NBFCs, offer these facilities today. Estimate the EMIs you will have to pay to your new lender with the balance transfer calculator available on their website. Following this, you can proceed to apply for it and enjoy the benefits.