All you need to know about Home Loan Balance Transfer

While browsing online or while reading newspapers many of us must have seen online ads, posters/hoardings on roads, and other forms of communication about Home Loan Balance Transfer. These ads talk about how opting for Home Loan Balance Transfer will reduce the borrower’s burden of Home Loan EMI. Thus, developing curiosity among potential borrowers who are looking to reduce their EMI load

What is Home Loan Balance Transfer?

One can opt for Balance Transfer facility when a borrower has a home loan running in a bank or financial institution. Many banks and financial institutions these days are running aggressive campaigns and advertisements for attracting borrowers towards them who are having home loans.

Choosing for a Balance Transfer facility will be beneficial when a borrower is paying high EMI to his/her lender. The borrower can choose to transfer his/her outstanding home loan to the opposite lender incase if the lender is offering lower interest rates which gradually decreases the lender’s EMI. Thus, Balance Transfer facility helps to save the borrower’s money which he had been paying to the previous lender by opting for transfer.

Things to note:

1. Check the interest rate of the lender who is offering transfer facility almost every financial institutions these days are offering transfer facility
2. Confirm if the low interest rate is applicable till the loan tenure is complete or the discounted rate is just for a temporary period.
3. Check all the charges between both the lenders that may be involved before transferring
4. You need to check loan eligibility with a new lender. There may be a possibility that your previous lender may be giving you higher loan eligibility, but you may not fit into the eligibility criteria of the current lender with whom you will transfer. In such case, you may have to increase your contribution.

How are you saving?

For instance you have taken a home loan of Rs. 40 lakh for 30 years @ 9.5% at an EMI of Rs. 33,634. Currently your outstanding home loan amount is 35 lakh with a remaining tenure of 28.5 years.

Here, if you opt for a home loan balance transfer to another lender @ 8.5% p.a. for the remaining tenure of 28.5 years, your EMI would come down to Rs. 29711.

They below are some of the documents that you will be required while applying for Transfer:

• Address and ID proof of applicant
• Income proof
• Property papers
• NOC from the previous lender
• Home Loan document of all you EMI track record
• Property documents

If you wish to apply for a Home Loan Balance Transfer with Fedfina click here