Home Loans enable people to buy their dream home. However, with Home Loan interest rates in India currently hovering above 8% per annum, many borrowers are worried that they might be costly. Given how hefty the repayment amount is on a typical Home Loan, even a 1% drop in the interest on housing loan can translate into substantial savings.
If you are struggling to keep up with your Home LoanEMI payments due to the increasing interest rates, transferring your balance to a bank offering more competitive Home Loan interest rates might be wise. The Reserve Bank of India has even waved off the foreclosure charges, so borrowers can now easily transfer Home Loans to another bank to avail of lower interest rates.
Before learning how to apply for it, let’s understand what a Home Loan transfer is and how it can benefit a borrower.
Home Loan Balance Transfer- A Brief
The process of shifting the outstanding balance of a Home Loan from one bank to another is known as a Home Loan transfer. In simple words, this means that a new bank takes over the loan by paying off the old bank in full, after which the borrower commences the monthly instalment (EMI) payments to the new bank. Borrowers typically do this to benefit from lower interest rates with home loan emi calculator: emi calculator kotak home loans or loans with better terms and conditions.
On that note, let’s discuss a few important steps that borrowers can follow to transfer their Home Loan from one bank to another, all from the comfort of their home.
Steps for Online Home Loan Transfer
To take advantage of the online Home Loan balance transfer facility, follow these tips.
Finalise the New Bank
Initially, borrowers must carefully evaluate prospective banks. They should compare interest rates, terms and conditions offered by various banks and select the best option for their situation. Once a bank has been chosen, borrowers can move on with the balance transfer process with that particular bank.
Apply for Home Loan Transfer With a New Bank
Let’s take a look at the steps to apply online for a Home Loan transfer to a new bank.
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They must first go to the bank’s website and read all terms and conditions carefully.
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If they are content with all terms of repayment, they can submit an online application for a Home Loan transfer.
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Now they need to provide all the necessary details about their current loan, bank, and property.
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After providing the aforementioned details, they can get an email with a loan offer.
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If they accept the offer, they must pay the processing fee and additional fees.
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Individuals must then upload the required documents related to identity & address proof, income and property and await approval.
Contact the Existing Bank
The next step for individuals is to contact their current bank and let them know they want to transfer the loan’s balance to another bank.
Obtain a Consent Letter and Other Documents From the Bank
Borrowers need to obtain a consent letter or No objection Certificate (NOC) from their existing bank, which must include the borrowers’ outstanding loan amount and property details. Additionally, they must get back all important documents, such as property papers, land deeds, and others held by their current bank.
Foreclosure of Loan Account
Once all necessary documents have been received, along with the consent letter from the existing bank, the next step is to apply for foreclosure of the current loan account. Upon getting possession of the property documents, the new bank will pay off the outstanding loan amount, and the previous account will be permanently closed.
Sign a New Loan Agreement
The borrower must sign a fresh loan agreement with the new bank to refinance the Home Loan. The agreement should outline the interest rate, loan term, outstanding loan balance and all terms and conditions.
Conclusion
By following these steps, you can transfer your Home Loan to a bank of your choice and reap the benefits of their services. However, it is advisable to exercise caution and be sure before making any move to avoid any adverse impact on your long-term financial well-being.
