Home Loans have become the most popular tool to achieve one’s dream of buying a home. With so many banks and HFCs offering tailored home loan solutions, people are now more inclined towards home buying. Banks and HFCs have home loan eligibility calculator that will help you assess how much loan banks will give you and what will be your EMI.
Home Loan Transfer
Balance transfer, home loan refinancing are interchangeably used with Home Loan Transfer. It helps the borrower to avoid higher interest rates by transferring to another lender which offers lower interest rates. Borrowers usually prefer this option to reduce the burden of interest rate and EMI. The good news is that all the banks and many HFCs in India offer the facility of home loan transfer.
Do You Know!
Although Home Loan Transfer appears to be a lucrative scheme yet one needs to try cost-benefit analysis before opting for a balance transfer.
Firstly, to avail the option of Home Loan Transfer, you need to be in the good books of the bank, make sure that you pay your EMIs regularly.
Secondly, balance transfer decision depends on the difference between interest rate offered by the two banks (one from where you have taken the loan and second from the bank where you wish to transfer your home loan).
Last but not the least, the outstanding amount of the home loan and the tenure left is also an important factor to consider before going for a Home Loan Transfer. Because, it is not a good deal if unpaid loan amount and tenure both are low. Though there are no prepayment charges levied, but while transferring the loan, calculate for the processing fees. It is calculated on the outstanding loan amount, usually, the maximum is Rs. 8,000.
Calculate Before You Go For A Home Loan Transfer
Always calculate. For example, if 50 lac is outstanding loan amount and your bank charges interest rate of 12 % then you have to pay a total of Rs 58, 01,513 as interest and you choose home loan transfer option to another bank offering interest rate of 11.5% for a time period of 15 years then the interest that you have to pay comes to be 55, 13,708 which means you save 2.87 lac.
This is a substantial amount and even if your bank levies a processing fee for home loan transfer, your saving is on a higher side. So,you can go ahead with balance transfer option.
An important note which banks consider before lending is your credit score. Always check your credit score before applying for a balance transfer. It is important that your credit health score is good and you have all your bills cleared.
Banks usually charge 0.5% of the loan amount or flat fees of Rs. 5000-10,000 as processing fee for home loan transfer.
How does home loan balance transfer help you?
Advantages of balance transfer includes the following :
- It lowers the monthly installment
- You can save on your interest and use for an important reason.
- Makes your home loan more affordable
- Banks and HFCs also offer customized solution that will match your requirement
Home Loan Transfer Process
- Submit a request form to your current bank. The application also asks for the name of the new bank where you will be transferring the loan.
- After this, the bank will look into your application and will issue an NOC (No Objection Certificate) that mentions outstanding loan amount.
- This NOC is then submitted to the new lender and the new bank will study your credit history.
- CIBIL score should be 700 points to get a loan. Once bank approves your application, all the property documents and other documents like ID proof, ITR etc. are transferred to the new bank.
- Voila!!! You now have your home loan at a better interest rate and you are ready to smile even bigger now.
Our Role: LoanYantra is an unbiased platform where we offer you the best options pertaining to a home loan. Our home loan transfer service will help you find the right financial institution which will lessen your burden of home loan repayment. Moreover, we have up-to-the-minute information related to lenders and interest rate changes in particular.
Not only availing home loan transfer through loanyantra will make the process easier, but also we will keep a track of your interest rate till you close the loan and help you reduce it whenever possible which helps in saving on the home loan.
Talk to us and let us know your requirement about home loan transfer to serve you better.