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    Home Loan Balance Transfer

    Home loan balance transfer, also called refinancing a home loan, is a process where a housing loan is paid off with another loan. People generally transfer the balance of a loan in order to attain lower rates of interest. In case a bank or other financial institutions are unwilling to reduce the interest rates on a particular loan, it can always be refinanced with a help of another bank.

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    How to Transfer a Home Loan Balance

    In order to transfer a home loan balance, follow the steps mentioned below.

    Step:1- Request your current lender for the documents required to refinance the loan.

    Step:2- After the lender provides you with a consenting letter with the outstanding loan amount, these documents will have to be provided to the new lender you wish to refinance your loan with.

    Step:3- The new lender will then transfer the outstanding amount to the old lender.

    Step:4- The old loan account will now be closed, and all future payments will go towards the loan you have availed with the new lender.

    Step:5- The old lender will then hand over all the property documents to the new lender, officially completing the refinancing process.

    Top 6 Reasons to Transfer your Home Loan Balance

    1. Refinancing your loan may lower you Equated Monthly Instalments (EMI) [Use Home Loan Emi Calculator to compute your Home Loan EMIs.] in some cases.
    2. As mentioned earlier, the rate of interest payable towards the loan reduces.
    3. Transferring your home loan balance will increase your credit score as well.
    4. While refinancing your housing loan, you can negotiate for a shorter tenure with the new lender.
    5. Often times, while looking out for a new bank to refinance your loan, you can opt for a bank that provides better service than your existing bank.
    6. Refinancing your home loan in the age of technology has become hassle free. The documentation required is minimal and more often than not, it is a quick procedure.

    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.

    4 Things to Keep in Mind before Transferring Your Loan

    Although the process of refinancing you Housing Loan is a simple process in this day and age, one must be mindful about the process. An impetuous move to transfer the loan may cause more harm than good. Keep the following points in mind before transferring your home loan balance.

    1. Credibility – It is important that the new potential lender is credible in lending out money and the reduced interest rate offered is not just a promotional gimmick.
    2. Consider all costs – Sometimes it can be easy to neglect costs that are associated with refinancing a housing loan. At the end of the day, you are transferring the housing loan balance to save money. If the costs like stamp paper, documentation charges, processing fee, etc. outweigh the savings you receive, it becomes illogical to refinance your loan.
    3. Quality of service – Sometimes, the service provided by a particular ban can overshadow the marginal savings received by refinancing your mortgage. It is important to do your research on the quality of customer support that a particular lender provides.
    4. Go through the fine print – A lowered rate of interest should not cause an inconvenience to you in future. Reading the fine print of the agreement from the new lender and the existing lender as well will give you all the information required to base your decision on whether or not to refinance your home loan.

    Eligibility Criteria for Home Loan Transfer:

    When choosing to move your existing home loan to another bank, take care of the following requirements:

    • The applicant’s age must not be lesser than 21 years and not over 60 years at the time of application. The latter is 65 years for Self-Employed individuals.
    • The applicable loan amount is based on a number of factors, including, age of the applicant, current income, number of co-applicants, debt, the applicant’s retirement age, etc.
    • The applicant must have a clear history of 12-18 months worth of unbroken repayments on his/her current home loan.
    • The applicant must have a minimum work experience of 2 years, with the last 1 year spent in the current organization. For self-employed individuals, the expectation is 2 years in the same profession with the filing of the requisite ITR.
    • Additionally, some banks may require a definite gross family income and a clear credit history, minus any red flags and a minimum CIBIL score of 700 points.

    Documents Required for Home Loan Transfer :

    Kindly carry along the following documents when you approach your prospective lender with regards to the home loan balance transfer. The success of any enterprise is in the documentation, right?

    • Fully completed Application form.
    • The applicant’s self-attested photographs.
    • Identity proof (could be any government issued ID- PAN Card, Voter’s ID etc).
    • Residential address proof.
    • Proof of Age (10th or 12th Marks Cards, PAN Card, Voter’s ID etc).
    • Official Address (Applies for self-employed, can be rent agreement, utility bills, lease etc).
    • Income Proof in terms of prior 6 months bank account statements that shows salary credit, last 6 months salary slips and Form-16 accounting for the last 3 years.
    • For Self-Employed individuals, the income proof is established by-

      Last 3 years ITR (self and business),

      Last 12 months bank account statement (self and business),

      Profit and Loss Account,

      Balance Sheets that are thoroughly audited by a certified CA,

      Complete Business Profile and Proof of Business Existence.

    • Bank statements amounting to last 12 months of the account from wherein the home loan EMIs were deducted.
    • A complete list of documents relating to the property, that is currently in possession of the present home loan lender. Also, the Loan statement copy.

    What are the Rates for Home Loan Balance Transfer?

    Home Loan Balance Transfer Rates
    Bank Lowest EMI Interest Rates
    LT Housing Finance Rs.870 for 30 Years 9.90% - 10.75%
    Vijaya Bank Rs.780 for 30 Years 8.65%
    Central Bank of India Rs.769 for 30 Years 8.50%
    Jammu And Kashmir Bank Rs.994 for 15 Years 8.65% - 9.00%
    Dhanlaxmi Bank Rs.972 for 20 Years 10.10% - 10.35%
    SBI Home Loan Rs.755 for 30 Years 8.30% - 8.50%
    HDFC Home Loan Rs.758 for 30 Years 8.35% - 8.95%
    Axis Bank Rs.758 for 30 Years 8.35%
    PNB Housing Finance Rs.776 for 30 Years 8.60%
    Bank of Baroda Rs.755 for 30 Years 8.30% - 9.30%
    LIC Housing Finance Rs.769 for 30 Years 8.50% - 8.90%
    Indiabulls Rs.758 for 30 Years 8.35% - 9.75%
    Citibank Rs.805 for 25 Years 8.50% - 8.60%
    DBS Bank Rs.874 for 20 Years 8.60% - 8.85%
    DHFL Rs.776 for 30 Years 8.60% - 9.75%
    Kotak Bank Rs.874 for 20 Years 8.60%
    Karur Vysya Bank Rs.846 for 25 Years 9.10%
    OBC Rs.802 for 25 Years 8.45% - 8.55%
    Karnataka Bank Rs.841 for 30 Years 9.50% - 9.75%
    Lakshmi Vilas Bank Rs.935 for 20 Years 9.55%
    Yes Bank Rs.863 for 25 Years 9.35% - 10.50%
    Standard Chartered Bank Rs.871 for 20 Years 8.55% - 8.65%
    Dena Bank Rs.809 for 25 Years 8.55% - 8.80%
    United Bank of India Rs.772 for 30 Years 8.55%
    Deutsche Bank Rs.929 for 20 Years 9.45%
    Edelweiss Rs.944 for 25 Years 10.50% - 10.90%
    IIFL Rs.769 for 30 Years 8.50%
    Reliance Capital Rs.878 for 30 Years 10.00% - 11.75%
    Indian Overseas Bank Rs.780 for 30 Years 8.65% - 9.15%
    Corporation Bank Rs.794 for 30 Years 8.85% - 9.10%
    PNB Rs.758 for 30 Years 8.35% - 8.45%
    City Union Bank Rs.1,069 for 15 Years 9.90% - 11.60%
    South Indian Bank Rs.812 for 30 Years 9.10%
    Bank of Maharashtra Rs.783 for 30 Years 8.70% - 8.80%
    Punjab and Sind Bank Rs.787 for 30 Years 8.75% - 9.00%
    RBL Bank Rs.930 for 25 Years 10.30% - 11.65%
    HSBC Bank Rs.815 for 25 Years 8.65%
    GIC Housing Finance Rs.982 for 20 Years 10.25%
    Indian Bank Rs.868 for 20 Years 8.50% - 8.60%
    DCB Bank Rs.997 for 20 Years 10.48% - 11.35%
    Federal Bank Rs.805 for 30 Years 9.00% - 9.25%
    Canara Bank Rs.780 for 30 Years 8.65% - 8.75%
    Union Bank of India Rs.755 for 30 Years 8.30% - 8.35%
    IDFC Bank Rs.772 for 30 Years 8.55% - 8.60%

     

    Should you Transfer the Balance on your Housing Loan or Simply Reset it?

    Transferring the balance from your home loan, although beneficial, is time consuming and has a lot of procedure associated with it. Not to mention that you will be breaking off a relationship with a bank that may have served you well. Resetting your balance with the same bank, on the other hand, is a simpler process. Not many people do this because they are oblivious to the fact that one can simply rest the interest rate of a loan by simply writing to the bank. This is an easier process to follow in order to reduce the interest rate on a housing loan.

    Therefore, the first choice should always be to rest the interest rate on a loan. In case the bank declines this request, you can always opt for refinancing afterwards.

    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.

    News About Home Loan Balance Transfer

    • Gift Vouchers Worth Almost Rs.15,000 Granted on Home Loan Transfer

      Grab your chance now!

      The most diversified financial services provider in the country, Bajaj Finserv, has made available a great offer to its customers who wish to transfer their present home loan for a lower rate of interest. Individuals who make an application for a home loan balance transfer between the 20th and 26th of March can avail a truly attractive rate of interest along with a gift voucher from Tanishq as well as a 3-EMI holiday. What’s more? The approval of the loan could be complete within five minutes. Customers can also make the most of flexi schemes, part prepayment facility, and loan top-ups. Individuals who apply for a balance transfer and the value of the loan is more than Rs.30 lakhs can win a Tanishq voucher worth Rs.30,000. For loan amounts that range from Rs.20 lakhs to Rs.29.99 lakhs can win a Tanishq voucher worth Rs.10,000.

      23rd March 2017

    • Time to change your home loan as some banks slashes rates

      Grab your chance now!

      In less than a day after RBI announced the landmark 50 bps cut in its chief policy rates during their fourth bi-monthly fiscal policy, State Bank of India has followed suit by bringing down the rate by .40 percent and the new rate currently stands at 9.30 percent. As India’s largest public sector bank, this step of SBI has set a high benchmark for other banks. Following suit, even smaller banks like Andhra Bank are reducing their rates by at least 25 bps, and the current rate is 9.75 percent as a result. This trend points to the fact that now is the ideal time to keep an eye on these rate shifts, particularly if you are planning to purchase a house with home loan or if you have a pending housing loan and switch accordingly.

      14th January 2016

    • Processing Fees Waived for Transfer of Home Loan to SBI

      The State Bank of India has offered a complete waiver of processing fees on transfer of home loans from other lenders. SBI has made this move to combat an ongoing battle for market share with top banks like HDFC and ICICI bank. In an effort to establish itself as a serious retail lender, SBI already offers the lowest home loan interest rates at 9.70% for women borrowers and 9.75% for others.

      With RBI’s ban on pre-closure penalties applicable on floating home loans, customers in India have been moving from one lender to another to get better interest rates. SBI’s home loan book had a 10% increase only due to transfers from other lenders and housing finance companies. This waiver will further strengthen the bank’s position as the preferred lender for home loans, with unbeatable interest rates.

      29th June 2015

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