A Home Loan balance transfer can be useful for borrowers if the new lender offers lower interest rates and better terms. And the best part is that the entire process from one bank to another is usually pretty quick and straightforward.
In this regard, there are several things that you can do to avoid future problems when it comes to home loan transfers.
1. First, you should research various lenders’ interest rates and carefully review their terms and conditions. It is only after careful study that you should finalise your decision.
2. Read the terms and conditions carefully and sign only if you understand every point.
3. Apply for a Home Loan transfer while you are still in the early stages of your repayment, as this will help you get lower interest rates. Depending on your financial health, you can choose shorter or longer repayment tenure while you opt for a home loan transfer.
4. If you want, you can also opt for a top-up loan while you transfer your home loan to a new lender.
5. All these factors are essential for you to consider before deciding to go for a home loan transfer.
Why Opt for Home Loan Transfer?
One major benefit of transferring a home loan balance is that you can save on interest costs in the long run. Also, if after availing of the loan, there is a fall in the overall lending rate, but your existing lender continues to charge a high-interest rate, you can consider transferring your Home Loan.
By opting for a loan transfer, you can also change the interest rate type from fixed to floating if you want. Another benefit of refinancing is that you can change the tenure by either increasing or decreasing it to suit your current financial condition.
When Should I Apply For Home Loan Transfer?
It is crucial to analyse and weigh its usefulness before you decide to go ahead with the same. Here are some situations when it is sensible to apply for a loan transfer:-
Suppose you are paying higher interest rates for a Home Loan in a bank that offers a lower interest rate, and you find a lender that offers lower rates; it is better to apply for a home loan transfer.
Also, if the present lender refuses to reduce the interest rate even after you maintain a healthy relationship with the organisation, you can consider transferring your loan to another lender.
Eligibility for Applying for Home Loan Transfer
Given below are the basic eligibility criteria for home loan transfer:
· The applicant should be between the age of 18 to 65 years
· The applicant can be either salaried or self-employed- valid proof for the same must be submitted to the lender
· Resident Indians and NRIs can apply for home loan transfers
Documents Needed for Home Loan Transfer
It is important to furnish certain documents to the bank where you are transferring your home loan. These documents differ based on the type of applicant you are. In case you are self-employed, you will have to submit the documents listed below:
· Identity Proof and Residence Proof
· Signature Proof
· Income Proof
· Documents About Banking Details
And in case you are salaried, the documents that you need to submit for applying for a home loan transfer include the following:
· Proof of Identity and Residence
· Income Proof and Banking Details
· Signature Proof
Home Loan Transfer Charges
In general, interest rates for home loan amount transfer begin at 8.50% p.a., and the processing fee is 0.25% to 2% of the applied loan amount.
Apart from that, similar to how home loan processing fees are applicable when applying for home loans, processing fees are applicable for home loan transfers as well. There are certain charges associated with the process of home loan transfer; some of these are processing fees, fees for external opinion, statutory charges, and incidental charges.
There is no harm in always looking for better opportunities and offers when it comes to making the most of the home loans that you are paying. The best part is that all top financial banking companies now have self-explanatory and user-friendly websites. Visiting their website will give you a clear idea about their home loan transfer process and how long the transfer takes.
You will also find easy EMI calculators, which will further make things more manageable for you. And once you make up your mind, visit the official websites as they provide an easy step-by-step process to apply for your home loan transfer.