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  • Home Loan Balance Transfer

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  • Sign up for a home loan balance transfer plan for a period of up to 30 years and pay your EMI with interest rates as low as 8.55% p.a. The processing fee applicable ranges from 0.25% to 2% of the loan amount.

    Interest Rate Starting from 8.55% p.a.
    Processing Fee 0.25% to 2%
    Loan Tenure Up to 30 years
    Lowest EMI (per lakh) Rs.772

    Go for a home loan balance transfer plan to lower your repayments. Some banks also offer additional top up loans along with this facility, which you can use to increase your loan limit. You can enjoy this facility for a period of up to 30 years with an interest rate starting from 8.55% p.a.

    Top Bank Interest Rates for Home Loan Balance Transfer

    Banks Interest Rate
    SBI Balance Transfer of Home Loan 8.55% p.a. onwards
    HDFC Home Loan Balance Transfer 8.60% p.a. onwards
    Axis Bank Home Loan Special Balance Transfer Scheme 8.90% p.a. onwards
    ICICI Bank Home Loan Balance Transfer 8.80% p.a. onwards
    Bank of Baroda Home Loan Takeover Scheme 9.70% p.a. onwards
    Indiabulls Home Loan Balance Transfer 8.80% p.a. onwards
    Citibank Takeover Plus Enhancement 9.65% p.a. onwards
    DHFL Home Loan Balance Transfer 9.75% p.a. onwards
    Kotak Mahindra Bank Home Loan Balance Transfer 8.90% p.a. onwards
    GIC Housing Finance Home Loan Balance Transfer 9.10% p.a. onwards
    YES Bank Home Loan Balance Transfer 9.60% p.a. onwards
    Piramal Capital & Housing Finance Home Loan Balance Transfer 9% p.a. onwards
    Standard Chartered Bank Home Loan Balance Transfer 9.41% p.a.
    DCB Bank Home Loan Balance Transfer 9.40% p.a. onwards
    Bajaj Finserv Home Loan Balance Transfer 9.05% p.a. onwards

    How to Apply for Home Loan Balance Transfer?

    • Step 1: Go to the concerned bank’s website.
    • Step 2: Check all the terms and conditions along with the interest rate and processing fee.
    • Step 3: If you are satisfied with the scheme, apply for balance transfer.
    • Step 4: You will need to fill in the required fields, including your name, property type, tenure of the existing loan, and the bank’s name, among others.
    • Step 5: Upon completion, you will be able to view your loan offer.
    • Step 6: Pay all the necessary fees and upload your documents
    • Step 7: Complete your application and wait for the approval.

    Eligibility Criteria

    • Age: 23 to 65 years
    • Type of employment: Salaried or self-employed
    • Nationality: Resident Indians and NRIs

    Documents Required

    For salaried

    • Identity proof
    • Address proof
    • Documents related to the existing loan
    • Last 3 month’s salary slips
    • Last 6 months’ bank statements
    • Passport size photograph

    For self-employed

    • Identity proof
    • Residential address proof
    • Documents related to the existing loan
    • Last 3 years’ Income Tax Returns along with computation of income
    • Last 6 months’ bank statements
    • Last 3 years’ balance sheet and profit and loss account statements

    Benefits of Home Loan Balance Transfer

    • Lower interest rates translate to lower monthly instalments
    • Top up loan facility available with most balance transfer plans
    • Helps switch to a better lender

    How much can I save by transferring my home loan balance?

    The amount of money you can save will depend on the following factors:

    • Principal amount of your outstanding home loan
    • Current EMI paid per month
    • The current tenure of the outstanding loan (in months)
    • Rate of interest provided by the new lender to which the loan will be transferred
    • Required tenure in months of the new balance transfer home loan

    For example, if the outstanding principal amount is Rs.40,00,000, the current EMI paid per month is Rs.40,000, the tenure of the current loan is 240 months (20 years), the interest rate offered by the new lender for balance transfer loan is 8.85% and, if the required tenure for the new loan is 240 months (20 years), you will save an amount of Rs.10,55,040. Your monthly EMI will reduce from Rs.40,000 to Rs.35,604.

    The total amount to be paid will reduce from Rs.96,00,000 to Rs.85,44,960. If you opt for a shorter tenure, you may not save a lot of money but you can pay off the loan faster with while paying a similar amount of EMI as your existing loan.

    Steps for Home Loan Balance Transfer
    Home Loan Balance Transfer Process

    Home loan balance transfer calculator

    With technology inculcated into finance, one can effortlessly estimate the details and benefits he/she would receive from transferring a home loan to another bank. One simply needs to enter the basic details of the existing loan like outstanding loan amount, interest rate, tenure, etc. By entering these details, the calculator would be able to estimate the savings you would incur by transferring your balance to another bank. Some websites also provide you with a detailed list of the banks that refinance a home loan along with the interest rates, processing fee, EMI, savings, etc.

    Process to refinance your home loan from one bank to another

    Your home loan can be refinanced by following the steps mentioned below:

    • Obtain all the necessary documents required to transfer your home loan balance from your current lender.
    • Obtain a consenting letter from the existing bank along with the outstanding loan amount.
    • Provide these documents to the new bank that you wish to transfer the housing loan balance.
    • The new lender will then pay off the balance due to your old lender.
    • Subsequently, your old loan account will be closed, meaning all payments towards the loan will have to be paid to the new bank.
    • All property documents will then be handed over to the new bank, officially completing the process of transferring your home loan.
    Reasons why you need to transfer your home loan
    • The interest rate on your home loan may reduce after refinancing your home loan.
    • Either your EMI will reduce and your tenure will remain the same, or your EMI will remain the same and the tenure will become shorter.
    • This will make the overall cost of the loan lesser.

    When refinancing a home loan, one must always take into consideration the processing charges and balance transfer fees. If the new bank’s interest rate plus these additional charges still prove to be cheaper than the current loan, only then should a customer choose to refinance the loan.

    Why and when must you avail the home loan balance transfer?

    Why?
    • One can avail a home loan balance transfer if he/she is paying a higher interest rate towards a loan in a bank that offers a lower interest rate.
    • If a bank is unwilling to reduce the interest rate despite the fact that you have a cordial relationship with the organization.
    • In the occasion that other bank are offering lower rates of interest.
    When?

    A home loan balance transfer can be availed 12 – 18 months after faithfully paying off your existing housing loan.

    Difference between home loan and home loan balance transfer

    Home loan – A home loan is a loan availed from a bank or other financial institutions in order to purchase a house, land, construct a property or simply to renovate an existing property. A lot of documentation and verification is required to avail a home loan. It also is considerably harder to get a housing loan application approved.

    Home loan balance transfer – This is when you transfer an existing home loan from one bank to another. Also known as refinancing, this also helps an applicant avail lower interest rates and better services. There is lesser documentation involved in home loan balance transfer and it easier to attain when compared to a home loan.

    FAQs
    1. Can I get tax benefits on balance transfer facility?

      Yes, you can get tax benefits on the principal amount and the interest earned with the balance transfer scheme based on the Income Tax Act, 1961.

    2. I have taken a loan to purchase an under-construction property. Am I eligible to sign up for a balance transfer facility?

      Yes, ideally you can sign up for a balance transfer facility even if you have taken a loan to purchase a house that’s under construction. However, this may vary from bank to bank. So, check with the concerned bank once before applying.

    3. Are the interest rates of balance transfer lower than a normal home loan?

      No, the interest rates for a balance transfer scheme offered by a particular bank are same as the home loan rates offered by that bank. But here’s how such schemes help you save on your repayments. Suppose you have taken a home loan of Rs.55 lakh from a bank at an interest rate of 9.50% p.a. for a period of 20 years. Upon calculation, your monthly EMI will come up to Rs.51,267. To reduce your repayments, you can transfer your outstanding balance to another bank by signing up for a balance transfer plan that’s offering you an interest of 8.70% p.a. This will automatically bring down your EMI considerably.

    4. When can I apply for a balance transfer plan?

      If you already have an existing home loan and have a payment track of 1 year or more against the loan, you can sign up for a loan transfer facility.

    5. Is prepayment penalty applicable in case of loan transfers?

      Yes, prepayment penalty will be charged based on the bank’s existing conditions for fees and charges.

      

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