How to Transfer Home Loan Balance in India?

Often after taking a home loan from a specific lender, a borrower may find that another lender offers home loans at a comparatively lower rate of interest. Under such a situation, borrowers often opt for a home loan balance transfer. This comes as a boon for those home loan borrowers who want to reduce their EMI amount or want to enjoy better interest rates. It provides borrowers with the opportunity to transfer their outstanding home loan amount to another financial institution. Below are the steps provided to easily transfer home loan amount to another lender.

Steps to transfer home loan balance

Here is a step-by-step guide following which one can easily opt for a home loan balance transfer.

1 Submit an application to the existing lender

When borrowers decide to opt for a home loan balance transfer, they must inform their current lender regarding the same. They can inform via a letter or by filling up a form. Whatever be the medium, one has to ensure to point out the reasons carefully why the borrower wants to transfer the home loan balance. In case of filling out the form, one has to make sure that it is done carefully and precisely.

2 Collect a no-objection certificate

After submitting the application, the lender gets back to the borrower with a consent letter or a no-objection certificate. Ensure to collect this important document, as this will be needed while filing the application with another lender. One can also check out other reasons why one should get a NOC.

3 Submit all the essential documents

After receiving a NOC from the current lender, borrowers have to contact the new lender and hand over all the essential documents to them. Apart from KYC documents and NOC, one might also have to submit a copy of their filled application form, loan balance, property papers, interest statements, etc.

• Get confirmation consent from the old lender

After the borrower has successfully submitted all their documents to the new lender, they must await until they get a final confirmation regarding the closure of their loan account with them. This confirmation will certify that the loan contract and the terms governing it have finally ended with them.

• Start anew by paying all the fees involved

Once the contract with the previous lender terminates, the borrower can sign a contract with the new lender and start anew by paying all the dues. After this, one can also pay the next month’s EMI for housing loan to one’s new lender.

• Sign a new loan agreement and submit the required documents

After the fees are paid, and dues are cleared, a fresh loan agreement is signed between the new lender and the borrower. Also, a cheque stating the amount equivalent to the outstanding amount will be issued by the new lender in favour of the old lender.

In addition to this, the borrower needs to submit some more documents required for transferring home loan balance. Though these documents vary from lender to lender, there are some documents that the borrower needs to submit from their current lender.

It includes documents like:

1. Sanction letter
2. List of original documents held at the lender
3. A statement of loan account for the last one year and  others

• Keep a check on the processing charge

Last but not least, one should examine the processing fee that is being charged by the new lender. Typically, it is 1% of the total loan amount. Occasionally, some financial institutions run a special promotion for a certain time period; the lenders often waive or lower the processing charge.

After knowing all the charges and fees, one can even calculate the outstanding home loan amount using a home loan balance transfer calculator. This will make the process easier and seamless for borrowers as well as for new lenders.

Once the borrower completes the entire process successfully, they can reap the advantages of a lower interest rate provided by the new lender.

Various NBFCs and other reputed financial institutions provide pre-approved offers. These offers help streamline the loan application process and are available for different financial products like loans against property and many others. Individuals can check their pre-approved offers by entering the requisite details, like their names and contact numbers.

Following this comprehensive guide, one can easily opt for a home loan balance transfer with the financial lender of their choice and enjoy loans at lower interest rates.