Getting Better Interest Rates Somewhere Else? Know How to Transfer Your Home Loan

Paying off a home loan is no mean feat. Apart from managing all your expenses and bills, you have to pay off heavy EMIs in a disciplined manner. But what if that burden was reduced for you? Even a minor decrease in your existing home loan interest rate can result in major savings. 

This is the reason why astute home buyers always stay informed on the possibility of home loan balance transfers. You may already be in your third year of paying off your home loan for your dream property in Nerul, Navi Mumbai, but if you are getting better interest rates from a different lender and your existing one is not willing to renegotiate terms, always explore the option of a home loan balance transfer. 

Today, transferring your remaining home loan balance to another bank or lender is accessible, swift and financially beneficial. So, how can you actually transfer your home loan? 

5 Steps to Transfer Your Home Loan to Another Lender

Just like every other loan-related process, balance transfer also requires prior application, documentation and processing before approval. Here is how you can process a transfer it without any hassle:

1. Identify the new lender

It goes without saying that your new lender should offer better terms than your existing lender. That primarily means a reduced rate of home loan interest rate. Another factor to look for is how swiftly the process can be done. Ultimately, it is up to you to thoroughly examine the total cost of both existing and new home loan offers and proceed only if it brings long-term financial benefit.

2. Prepare all necessary documents diligently

Next, you need to prepare all the required documents before filing a new home loan with another lender. Your current lender should provide you with documents that primarily reflect the current status of your home loan. They include a NOC or consent letter, KYC, loan account statements, a foreclosure letter, details of the outstanding amount and payment history, validation of title to a property, etc. 

3. Register your request with the existing lender 

Once you are all set to transfer the home loan balance, submit an application to your existing lender. This can be done either online or offline by filling out a form or writing an application letter. Don’t forget to request the NOC from the lender.

4. Apply with your new lender

Simultaneously, you should get in touch with your shortlisted lender and apprise them about your home loan transfer. The new lender will receive all the requisite documents from your old lender and evaluate them, along with the property papers and your credit history. At this stage, you will also have to clear any pending dues. Once your new lender completes your home loan eligibility and property evaluation, you should receive a new loan offer at better terms. 

5. Sign a new home loan agreement with the new lender 

Lastly, all you need to do is sign off your new home loan agreement . Your new lender will then pay off the balance home loan amount to your old one, and you can then start paying your EMIs as per the new terms. 

Here are a few more additional insights:

• You may also have to pay a home loan transfer processing fee that goes up to 1%, along with the stamp duty. 
• Opting for a home loan transfer early in your home loan tenure offers you the benefit of saving on the interest component of the EMI, which is significantly higher during the initial years.
• Don’t worry. RBI ensures you won’t face any balance transfer penalties or loan foreclosure charges from your old lender. 
• What if you also want to ‘balance transfer’ the loan amount for, let’s say, a commercial property in Navi Mumbai aside from your residential property in Nerul, Navi Mumbai? Yes, the process mentioned above works the same. 

Thanks to facilities like home loan transfer, it is easier than ever to maintain your financial security while also enjoying the perks of owning a home. The key is to stay informed on your home loan and always be on the hunt for better offers from other lenders. By timing your home loan balance transfer right, you will be able to maximise your savings from the shift to new EMI terms.