In today’s volatile market the interest rates on loans keep changing. So, a Home Loan that you’d taken some time back may have an interest rate which is much higher than the current rate. If you’re in such a situation, shifting your loan from the current lender to a new one will be the best way to lessen the burden of paying extra interest. This is the logic behind a Home Loan Balance Transfer.

All you need to do is recognise a lender offering a low rate of interest, place a request for the switch, and continue repaying to the new lender once your request is approved. There are financial institutions like Bajaj Finserv who offer great features like Online Application Process, Instant Online Approval, Minimum Documentation, Additional Top loan at attractive rates, No Hidden Charges, Customised Insurance Schemes, and Online Account Access. They also offer facilities like NIL Part Pre-Payment charges, NIL Foreclosure charges, and 3 EMI Holiday.Learn more about what are foreclosure charges?

If you have made the decision to change your lender, take a careful look at the list of documents and conditions given below.

Eligibility for Home Loan Balance Transfer

Whilst Applying for a Home Loan Balance Transfer, shortage of lenders will never be an issue. There’ll be plenty in the market offering competitive rates. And like their rates, their eligibility criteria will also differ. However, the ones mentioned below are common for all, and need to be satisfied at all costs.

  • You must be an Indian national
  • Age of the candidate must fall between the 28-70 years bracket
  • You must be a salaried individual who draws a stable monthly salary or a self-employed individual with an establishment that is at least 5 years old
  • Employment details that indicate a steady income and chances to earn more in the future
  • Solid credit score without any history of uncleared debts or late repayments

Documents Required for Home Loan Balance Transfer

Given below are the list of documents and the complete process of a loan transfer—from submitting the request to the transfer of outstanding amount between lenders.

The Documents To Be Submitted

  • Copy of property documents
  • Details of the outstanding loan amount
  • Foreclosure letter

For Salaried Candidates

  • Employment certificate
  • Pay slip copies
  • Tax Deducted at Source (TDS) certificate
  • Bank statements and latest Form 16 issued by the employer

For Self-employed Individuals

  • Copy of audited financial statements for the past couple of years
  • Copy of the partnership deed if the venture is co-owned
  • Copy of Memorandum of Association (MOA) and Articles of Association (AOA)
  • Profit and loss account details for the last few years
  • Income tax assessment details

The Transfer Process

  • The first step is to submit a letter to your existing lender requesting a balance transfer
  • If they deem your request worthy, a letter of consent, a no objection certificate, foreclosure letter, property documents, and loan statement that shows your EMI payment history will be will be given in return
  • You should then approach the new lender with the documents listed above and the application form
  • Next, submit documents that prove the ownership of the property for which you are taking the loan
  • You will also have to submit an NOC from your housing builder along with the documents procured from the first lender
  • Next come your professional credentials like bank statements, IT returns, Form 16, and salary slips
  • If the loan is granted, the new lender will hand over a cheque of the balance principal amount to the old lender
  • The latter will then transfer all your loan papers to the new firm and cancel your post-dated cheques

When applying to a new financial firm, you must carefully gather and submit all documents required for Home Loan balance transfer.

In order to improve your chances of getting a more favourable interest rate with the new bank, follow all Home Loan Balance Transfer rules and regulations. The process might seem tedious, but if done with care, it can lead to significant long-term financial benefits.