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Know the Tactics of Your Home Loan Balance Transfer

Considering the escalated demand for affordable housing options, multiple NBFCs offer home loans that come with a hefty credit amount and extended tenor. These advances come with the reassurance of repayment via liquidation of the mortgaged asset in case of defaults. Following this, lenders charge a lower rate of interest that leads to the reduced total cost of the loan.

However, considering that these credits are long term ones, borrowers can always opt for transfers to financial institutions that offer a further reduced interest rate. It ensures further affordability of the advance. However, it is essential that one takes into consideration the multiple aspects of the new lender and ensure that this new financial deal will not add on to their financial burden. In an attempt to ensure this, reputed NBFCs offer home loan transfer calculator that helps one have an estimate of the additional charges, rate of interest and the total cost of credit involved.

Before you transfer your outstanding balance, let’s first understand what balance transfer is.

The balance transfer facility allows you to carry forward your outstanding loan amount to another lender offering credits at a lower-interest rate. Home loan transfer makes your EMIs affordable and reduces the financial burden. Your lender may also give you an option to extend the loan tenor if you have financial stability and a regular source of income.

Some benefits of a home loan transfer are given below. Borrowers can

  • Get to enjoy an advance at a low-interest rate.
  • Avail a top-up loan on your existing home loan.
  • Avail a loan without any pre-payment and foreclosure charges.
  • Make such transfers online.
  • Get to enjoy affordable EMIs.

What are the tactics to avail a home loan balance transfer?

Step 1:

Compare your existing lender with multiple other NBFCs based on the interest rate and additional charges. Ask your preferred lender to provide you with different financial quotations. Also, before you plan for a balance transfer, know the MCLR to calculate the interest rate.

Step 2:

Check whether you can qualify for a balance transfer or a home loan with the eligibility calculator provided by your new lender.

Step 3:

Send a letter to your existing lender stating your will of a balance transfer. After approving your request, the lender will issue a no-objection certificate, property documents, letter of content, foreclosure letter and other essential documents that you have to furnish to your new lender.

Step 4:

Apply for a housing loan with your new lender. To apply, you will have to fill the application form with your personal, financial and employment details. Submit all the necessary papers like your

  • KYC documents – Aadhaar card, PAN card, driving license, passport, voter ID, etc.
  • Address proof – water bill, gas bill, telephone bill, electricity bill, etc. ;
  • Income proof – bank account statement, income tax report, and salary slips, profit and loss statements, etc.
  • Passport-sized photograph
  • Identity proofs

Along with the mentioned papers, you will also have to provide the ownership document of your property and a no-objection certificate from the builder.

Once the lender verifies all your documents and evaluates your financial condition and balance transfer eligibility, your request will be approved. Your new lender will pay off the outstanding amount of your previous lender and will close the loan. Once the home loan takeover is done, your lender will transfer all the required papers to your new lender, thus completing the process.

Several financial institutions and NBFCs provide such loans with a balance transfer facility. Balance transfer facilities also ease your repayment terms and lower your EMI amount. Before you make a balance transfer make sure you inquire about additional charges such as processing fee, late payment charges, etc. You can use the home loan transfer calculator to estimate your loan amount and interest rate.

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