Can I Transfer the Home Loan to Another Bank?

In case of home loans, when any other bank is offering a lower interest rate, the borrower can transfer the existing loan to another bank. This process is called home loan balance transfer. This is also applicable for loan against property as it is also a mortgage loan. This facility is profitable for those who took the loan at a higher interest rate and now are eligible for lower rates because of improvements in credit profile. 

Benefits of Home loan balance transfer 

Following are the advantages of transferring home loan balance. 

• Lower interest rate: Many borrowers might have taken loans with a higher interest rate on home loans due to a poor credit profile and lower loan eligibility. Over the years if they have managed to improve their credit profiles, they will be eligible for a loan with a lower interest rate. 
• Top-up loan: Borrowers who have opted for a balance transfer can also avail top-up loans which can be used for any personal or professional needs. 
• Maximum tenor: Borrowers can choose the repayment tenor as per his/her convenience. 
• Different loan terms: The loan terms and conditions may be different in another financial institution, making it an favourable proposition for some borrowers.  
• Hassle-free processing: The processing is not complicated. The borrower has to apply online for a balance transfer and he/she can check the status and details in the online customer portal. 

Eligibility Criteria for Transferring Home Loan Balance Transfer 

Borrowers who pay EMIs regularly can opt for home loan balance transfer. Below are the eligibility criteria for the following. 

For salaried individual 

• Must have a minimum of 3 years of work experience with a private or Public Sector Company or an MNC. 
• Age should be between 23 and 62 years. 

Self-employed individuals 

• The borrower must have a minimum of 5 years’ steady income from an enterprise.

• The age should be between 25-70 years.  

Documents Required for Home Loan Balance Transfer 

The following documents are required to be submitted if any borrower meets the eligibility criteria. 

• Bank account statements from the last six months 
• Identity and address proofs 
• Photographs 
• TR documents and P&L statements for the last 2 years (for self-employed individuals)
• Latest salary slips or Form 16 (for salaried individuals) 

Home Loan Balance Transfer EMI Calculator 

The amount that can be saved by availing balance transfer depends on:

• The current EMI 
• Principal amount of the outstanding home loan 
• Interest rate offered by the new lender 
• Current tenor of the outstanding loan.

Home loan balance transfer process 

Here is the process for applying for a home loan balance transfer. 

Step 1: Visit the lender’s website 

Step 2: Then visit the Home Loan section on their website 

Step 3: Check the terms and conditions along with interest rates and processing fees

Step 4: If satisfied with the scheme, apply for balance transfer 

Step 5: Submit income and personal details (such as employment type, full name, PAN, loan type, mobile number, etc.) 

Step 6: Lastly, submit the details of the property which is applicable for balance transfer

Besides this, there are some lenders in India which offer pre-approved offers on financial products like loan against property and home loan. This offer is only applicable for their existing customers. Borrowers must know about the home loan verification process and they can speed up the process of loan application by accepting these special deals. They simply need to enter names and contact details to check the pre-approved offers. 

Borrowers who opt for a home loan balance transfer should consider the processing, application, inspection and other applicable fees during the cost of a balance transfer. These fees and expenses must be lower than the amount owed in interest. However, balance transfer is generally a profitable offer that eligible borrowers can avail to make repayment more convenient.