HOME LOAN TRANSFER

Home Loan Balance Transfer

Enroll in a home loan balance transfer program with a repayment tenure of up to 30 years and compute your Equated Monthly Installment (EMI) at competitive interest rates starting from 8.40% per annum. The processing fee varies, ranging from 0.25% to 2% of the loan amount.

Note: Interest rates begin at 8.40% per annum. 

The minimum Equated Monthly Installment (EMI) is determined using a home loan calculator, based on a loan amount of Rs.1 lakh for a 30-year term, with an 8.40% interest rate and a 0.25% annual processing fee.

Top Home Loan Transfer Rates for September 2023

Note: Please be aware that these rates represent starting points and can vary based on several factors. The final interest rate offered is subject to the discretion of the respective lender.

By integrating technology into finance, individuals can easily assess the specifics and advantages of moving their home loan to a different bank. All that's required is inputting essential information about the current loan, such as the outstanding loan amount, interest rate, tenure, and so on. By providing this information, the calculator can promptly calculate the potential savings that would result from transferring the loan balance to another bank.

How to Calculate EMI for a Home Loan Balance Transfer?

The potential savings through a balance transfer are influenced by the following factors:

• The outstanding principal amount of your current home loan.
• Your current monthly EMI payment.
• The current loan tenure in months.
• The interest rate offered by the new lender for the balance transfer.
• The required tenure in months for the new balance transfer home loan.

For instance, if you have an outstanding principal of Rs. 40,00,000, pay a current monthly EMI of Rs. 40,000, have a loan tenure of 240 months (20 years), receive an 8.85% interest rate from the new lender for the balance transfer, and choose a required tenure of 240 months (20 years) for the new loan, you can potentially save Rs. 10,55,040. This reduction will decrease your monthly EMI from Rs. 40,000 to Rs. 35,604.

Furthermore, the total amount to be paid will decrease from Rs. 96,00,000 to Rs. 85,44,960. If you decide on a shorter tenure, your savings may not be as substantial, but you can repay the loan more quickly while maintaining a similar EMI amount as your current loan.

How to Transfer Your Home Loan from One Bank to Another?

Home Loan Balance Transfer Guide

• Visit the official website of the bank you are interested in.
• Review all terms, conditions, interest rates, and processing fees associated with the transfer.
• If you are satisfied with the terms, proceed to apply for the balance transfer.
• Complete the application form, providing essential information such as your name, property details, current loan tenure, and the name of your current bank.
• After submission, you will receive details of your loan offer.
• Pay the required fees and upload the necessary documents.
• Finalize your application and await approval.

The Home Loan Transfer Process

To refinance your home loan, follow these steps:

• Gather all the required documents for transferring your home loan balance from your current lender.
• Obtain a consent letter from your existing bank, along with the outstanding loan amount.
• Submit these documents to the new bank where you intend to transfer your housing loan balance.
• The new lender will settle the outstanding balance with your old lender.
• Subsequently, your old loan account will be closed, and all future loan payments will be made to the new bank.
• Transfer all property documents to the new bank, officially completing the home loan transfer process.

What Are the Eligibility Requirements for Home Loan Transfers?

Age: 23 to 65 years 

Employment Status: Salaried or self-employed 

Nationality: Resident Indians and NRIs

Which Documents Are Necessary for Home Loan Balance Transfer?

• Proof of identity
• Proof of address
• Existing loan-related documents
• Last three months' salary slips
• Last six months' bank statements
• Last three years' balance sheet and profit and loss account statements (for self-employed individuals)
• Passport-size photograph

Reasons to Consider Transferring Your Home Loan

• Potentially Lower Interest Rate: Home loan refinancing can lead to a reduced interest rate on your loan.
• EMI Reduction or Shorter Tenure: Refinancing may result in either lower monthly EMI payments with the same tenure or maintaining the same EMI while shortening the loan tenure.
• Cost Savings: Overall, home loan refinancing can reduce the total cost of the loan.

However, it's crucial to factor in processing charges and balance transfer fees when considering a home loan refinance. Only if the new bank's interest rate, combined with these additional charges, proves to be more cost-effective than your current loan, should you opt for refinancing.

Why and When Should You Consider a Home Loan Balance Transfer?

Why?

• When you are paying a higher interest rate at your current bank while another bank offers a lower interest rate.
• If your bank is unwilling to lower your interest rate despite your good relationship with them.
• In cases where other banks are offering more competitive interest rates.

When?

• You can consider a home loan balance transfer after faithfully paying off your existing housing loan for 12 to 18 months.

Differences Between Home Loans and Home Loan Balance Transfers

Home Loan: A home loan is a financial arrangement obtained from a bank or other financial institutions to facilitate the purchase of a house, land, property construction, or renovation of an existing property. The process involves extensive documentation and verification, making it relatively challenging to secure approval for a housing loan application.

Home Loan Balance Transfer: Home loan balance transfer, also known as refinancing, involves the transfer of an existing home loan from one bank to another. This option allows applicants to access lower interest rates and improved services. Unlike a traditional home loan, a home loan balance transfer requires less documentation and is generally easier to obtain. 

How to Calculate EMI for a Home Loan Balance Transfer?

The potential savings when transferring your home loan balance can be determined based on the following factors:

• The outstanding principal amount of your current home loan.
• Your current monthly EMI payment.
• The current tenure of the outstanding loan (in months).
• The interest rate offered by the new lender for the balance transfer.
• The required tenure in months for the new balance transfer home loan.

For instance, let's consider an outstanding principal amount of Rs. 40,00,000, a current monthly EMI of Rs. 40,000, a loan tenure of 240 months (20 years), and an interest rate of 8.85% offered by the new lender for the balance transfer. If you also choose a required tenure of 240 months (20 years) for the new loan, you could potentially save Rs. 10,55,040. Consequently, your monthly EMI would decrease from Rs. 40,000 to Rs. 35,604.

Furthermore, the total amount to be paid would decrease from Rs. 96,00,000 to Rs. 85,44,960. Opting for a shorter tenure may not yield substantial savings, but it would enable you to pay off the loan more quickly while maintaining a similar EMI as your existing loan.

How to Transfer Your Home Loan from One Bank to Another?

• Start by visiting the official website of the bank you are interested in.
• Thoroughly review all the terms and conditions, including the interest rate and processing fees.
• If you find the terms favorable, proceed to apply for the balance transfer.
• Complete the application form, providing essential details such as your name, property type, existing loan tenure, and the name of your current bank, among others.
• After submitting your application, you will receive a loan offer for your consideration.
• Make the necessary payments for fees and upload the required documents.
• Finalize your application and patiently await the approval process.

The Procedure for Transferring Your Home Loan

To refinance your home loan, simply follow these steps:

• Gather all the necessary documents required for transferring your home loan balance from your current lender.
• Secure a consent letter from your existing bank that includes details of the outstanding loan amount.
• Submit these essential documents to the new bank where you intend to transfer the housing loan balance.
• The new lender will then settle the outstanding balance owed to your old lender.
• As a result, your old loan account will be closed, and all future loan payments will be directed to the new bank.
• Finally, all property documents will be officially transferred to the new bank, thereby completing the process of transferring your home loan.

Home Loan Transfer Eligibility Criteria

Age: Applicants must be between 23 and 65 years of age. 

Employment Status: Both salaried and self-employed individuals are eligible. 

Nationality: Eligible for both Resident Indians and NRIs (Non-Resident Indians).

Documents Needed for Home Loan Balance Transfer

• Proof of identity
• Proof of address
• Existing loan-related documents
• Salary slips from the last three months
• Bank statements from the last six months
• Balance sheet and profit and loss account statements for the last three years (for self-employed individuals)
• Passport-sized photograph

Why Consider Transferring Your Home Loan?

There are compelling reasons to consider transferring your home loan:

• Potential Interest Rate Reduction: Refinancing your home loan can lead to a lower interest rate, reducing your overall interest expenses.
• Flexible EMI Options: You can either reduce your monthly EMI payments while keeping the tenure the same or maintain your current EMI while shortening the loan tenure.
• Cost Savings: Overall, refinancing can make your loan more cost-effective.

However, when contemplating a home loan refinance, it's essential to factor in processing charges and balance transfer fees. Only if the new bank's interest rate combined with these additional charges proves to be more economical than your current loan should you consider refinancing.

Why and When Should You Opt for a Home Loan Balance Transfer?

Why?

• Consider a home loan balance transfer if you are currently paying a higher interest rate at one bank while another offers a lower interest rate.
• If your bank is unwilling to reduce the interest rate, even if you have a good relationship with them.
• When other banks are providing more attractive interest rates.

When?

• You should explore a home loan balance transfer after consistently making on-time payments on your existing housing loan for a period of 12 to 18 months.

Difference Between a Home Loan and a Home Loan Balance Transfer

Home Loan: A home loan is a financial arrangement obtained from a bank or other financial institution to facilitate the purchase of a house, land, property construction, or renovation of an existing property. It involves extensive documentation and verification and can be challenging to secure approval for.

Home Loan Balance Transfer: Home loan balance transfer, also known as refinancing, occurs when you transfer an existing home loan from one bank to another. This process allows applicants to access lower interest rates and improved services. It involves less documentation and is typically easier to obtain compared to acquiring a new home loan.