Borrowers use the home loan balance transfer feature when they want to switch to a different lending institution that offers a lower rate of interest on their loan. Thus, it is important to carefully check the new interest rates before opting for the transfer.
To know whether switching to another lender is providing considerably more savings, borrowers can also use the home loan balance transfer calculator.
Things to consider before opting for a home loan balance transfer
Here are a few important points people should consider before they apply for a home loan balance transfer. Here are some:
- Negotiate interest rate – Borrowers can ask their current lenders for low housing loan interest rate and suitable loan terms before making the switch to another lender.
- Check and compare the interest rate of new lenders – Compare interest rates, features, and other home loan offers of the new lender with the current one. Customers can also make a comparison of the terms of a few tentative loan providers to find the best offer.
- Calculate transfer charges – Individuals should not make a balance transfer simply because of lower interest rates since transferring a home loan involves several other charges like application fees, processing fees, inspection charges, and so on. Applicants should make thorough inquiries about these additional costs to make sure they are saving money.
- Request for a No Objection Certificate (NOC) – After finalising a home loan balance transfer, applicants must request a NOC from their current loan providers which will aid them to move to the next step of the balance transfer.
- Collect all necessary documents – For switching to a new lender, borrowers are required to submit the loan documents from their previous lenders. Thus, they should make sure to collect all the necessary papers from their previous lending institutions.
Calculating the benefits from a balance transfer is simplified with a special tool.
Home loan balance transfer calculator
This online tool which is available on the lender’s websites for free calculates possible savings through a balance transfer with accuracy and ease. This can help applicants to make informed decisions related to the process.
After doing the needful, interested candidates can apply for a home loan transfer if they are eligible for it.
Housing loan balance transfer eligibility criteria
The factors that most lending institutions consider ideal for a balance transfer are same as home loan eligibility criteria.
Following are the requirements-
- Should be a resident of India (NRIs are not eligible)
- Business holding of minimum 5 years and proof of stable income (for self-employed individuals)
- Steady income through a job with a minimum 3 year experience (for salaried applicants)
- Age limit of 23-62 years (salaried)
- 25-70 years of age (self-employed)
Here, the upper age limit is taken as the applicant’s age at the time of maturity of the loan.
How to apply for a balance transfer?
The process of a balance transfer is fairly simple. Individuals can do it by following these simple steps:
Step 1: Open the home loan application form from the online portal of your preferred lender.
Step 2: Select the loan and occupation type and enter your PIN code.
Step 3: Input your personal and income-related details, such as name, date of birth, contact details, PAN, salary details, current bank, etc., in the relevant sections.
Step 4: Enter property details against which you are applying for the balance transfer.
Step 5: Click on the ‘submit’ button.
Step 6: On the ‘new interest rate’ scale, specify your desired rate of interest.
The process of balance transfer requires the applicants to submit several documents for verification, which is equally important as the eligibility criteria.
Documents needed for a home loan balance transfer
After meeting the requirements, candidates need to submit the following documents for a home loan balance transfer:
- KYC related documents
- Latest salary slips or form 16 (for salaried applicants)
- TR document and last 2 years’ P&L statements (for self-employed people)
- Recent photographs
- Bank account statements for the last 6 months
- Proof of business with 5 years of vintage.
Apart from providing various perks on balance transfers, many lending institutions in India provide attractive pre-approved offers on home loans and loans against properties. These offers streamline the overall loan application process. Eligible candidates can check their pre-approved offers from the lender’s websites by entering their details.
Using a home loan balance transfer calculator for doing the calculations related to the procedure will save the borrower’s time. This will let them prepare a better plan for balance transfer for smooth approval.
