Documents Required For a Home Loan Balance Transfer
Before we dive into the pile of documentation required for a transfer, let us first understand what exactly a Home Loan Balance Transfer is.
What is a Home Loan Balance Transfer?
When you buy a house, you first apply online for a Home Loan. You and the lender agree on certain terms and rates, and the loan is then sanctioned to you. However, in today’s volatile market the interest rates keep changing. So, an old loan that you’d taken years ago may have an interest rate which is much higher than the current rates. If you are in such a situation, you may want to shift your loan from the current lender to a new one. Bajaj Finserv provides better financial benefits like lower Home Loan interest rates, flexible payment options, EMI free months, and other such offers. This process of changing lenders is called a Home Loan Balance Transfer.
Sometimes your existing lender may ask you to pay a penalty while the new lender may ask for a processing fee. It is important that you try to negotiate a waiver with regard to both types of Home Loan Balance Transfer charges.
If you have made the decision to change your lender, then take a careful look at the list of documents needed to do so.
Required Documents for Home Loan 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
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
Balance Transfer Calculator
You can calculate your EMI amount when you opt for a Home Loan Balance Transfer and also find out the Top-up Loan amount you’ll be eligible for. All you have to do is fill in details like:
- Name of the bank in which you have the existing Home Loan
- Total sanctioned loan amount
- Existing rate of interest
- Loan starting month and year
- Tenure of loan
- Property location
Once you fill in this details, you’ll know the amount saved for the tenure of a loan, Top-up Loan eligibility, and the loan amount you would get after the balance transfer.
Home Loan Balance Transfer Process
– You will first need to submit a letter to your existing lender, requesting for a balance transfer.
– They will then give you a letter of consent, a no objection certificate (NOC), a foreclosure letter, a list of property documents (LOD), and a loan statement that shows your EMI payment history.
– Now you have to apply to the new lender, and submit all documents that are needed when applying for a fresh loan.
– First submit the application form, along with your photograph.
– You will also have to submit an identity proof, a date of birth proof, an address proof, and a signature proof.
– 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/society, along with the documents procured from the first lender.
– Next, the new financial institution will ask you for proof of income. You will have to show them your salary slips for the last three months and your IT Returns/Form 16 for the last two years.
– Furthermore, business continuity proofs like an appointment letter will be required.
– Finally, bank statements for the last three months will also have to be submitted.
– The new lending institution will verify all documents, look at your financial history, and evaluate your Home Loan Balance Transfer eligibility.
– 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.
– Finally, your post-dated cheques that lie with the old financial institution will be cancelled.
– The transfer process will then be complete.
Home Loan Balance Transfer Charges:
A few financial institutions may charge a processing fee when you apply for a Home Loan Balance Transfer but some banks and NBFC might be willing to waive it off if you have a good repayment record. On the other hand, your existing lender might charge 0.5% of the loan amount or a hefty fee for allowing you to close your loan account. This is done to recover the money spent on maintaining your loan account and to also make up for the losses to some extent.