Home loans are among the longest loans to serve. A portion of your income is consistently spent, over a long period, on the repayment of your home loan. The home loan interest rate, although presently low, amounts to a significant sum due to the long tenor. Besides, there is always another lender offering a better home loan deal with lower interest rates. Therefore, by opting for a home loan balance transfer, you can earn yourself a low-interest rate agreement for your prevailing home loan.
Eligibility for a home loan balance transfer
Before anything else, you must find out if you are eligible for the home loan balance transfer. To be eligible,
- You should have a prevailing home loan from another bank or lender.
- You should have completed paying at least 12 EMIs of your existing loan.
- You should not have defaulted in paying any or a specific number of EMIs for your prevailing loan.
- Also, if your property’s registration is not done, you are not eligible for the balance transfer.
While the exact specifications may vary, these are the common eligibility criteria sought by lenders when you apply for a home loan balance transfer.
Steps to follow for Home Loan Balance Transfer
- Visit the website of the lender where you wish to transfer your home loan.
- Go through all the terms and conditions and know their interest rate and processing fee.
- Once you are contented with their proposition, apply for the balance transfer.
- To apply, you have to fill in your personal details, financial details, employment details, current property details, tenure of your current loan, and existing bank’s name.
- Once you complete filling in the above-mentioned details, you can view your loan offer.
- Upload all the necessary documents and pay all the required fees.
- Upon completion of your application, wait for their approval.
But before you apply for the balance transfer from one lender to another, remember to do the following important tasks:
- Get all the important documents from your current lender, which are necessary for the balance transfer.
- Get a consent letter from the prevailing lender with the remaining loan amount.
- These documents are necessary to be submitted to the new lender where you wish to transfer the home loan balance.
- A home loan EMI calculatorcan help in your decision-making. So, use it to calculate the monthly installment and make a wise decision regarding your home loan balance transfer.
While transferring your home loan, do note that the cost of the transfer shouldn’t be too high. Charges by both the existing and the new lender may eat away some of the cost-benefit you hope to achieve. With that cost kept in mind and under control, you stand to save a lot of money in the long run through a home loan balance transfer.