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Home » Home Loan Balance Transfer When and Why You Need to Choose

Home Loan Balance Transfer When and Why You Need to Choose

Introduction- With technological advancement in finance, one is able to determine the specifications and advantages of a home loan balance transfer to another bank. Just input the basic details of the continuing loan, such as the outstanding debt sum, rate of interest, duration, and so on. By simply passing through all of this information, the calculator can figure out how much money you would receive from the home loan balance transfer to an alternate bank.

How Can You Estimate the EMI for a Home Loan Balance Transfer?

The amount of money that you may save can be determined by factors such as

  1. The total principal value of your current home loan.

2. Monthly EMI currently paid

3. The outstanding loan’s current term (in months)

4. The interest rate offered by the new financial institution to whom the loan is going to be transferred.

Here is an example shown below to understand the overall calculation easily

To give an example, if the remaining principal amount is Rs. 40,00,000, the present monthly EMI is Rs. 40,000. The present loan’s tenure is 20 years or 240 months.

The interest rate currently being offered by the newly selected lender for the remaining balance on the transfer loan is 8.85%, while the minimum required duration for the newly issued loan is 20 years or 240 months, so in that case, you can save up to Rs. 10,55,040. Your EMI is going to be reduced from Rs. 40,000 to Rs. 35,604.

The total payment is expected to be reduced from Rs. 96,00,000 to Rs. 85,44,960. If you choose a shorter repayment period, you will not be saving much money, but you will be able to settle off the loan more swiftly while covering the same EMI as your present loan.

How can I transfer my home loan balance from one bank to another?

Here is the step by step guide on how can you proceed with transferring

No 1: Browse the official site of the relevant bank.
No 2: Go through all of those terms and conditions, including the rates of interest as well as the processing charges.

No 3: If you like the plan, you can submit applications for the balance transfer.
No 4: Simply fill in the necessary details, which include your full name, type of properties, loan duration, and bank name, among others.
No 5: After completing this step, you will be allowed to check out your loan offer.
No 6: Make payments for all applicable fees and submit the necessary paperwork.
No 7: Submit your application form and await approval.

Home Loan Transfer Procedure
You may refinance your home loan by complying with the steps outlined below:

  1. Take out all of the documentation essential for transferring the remaining balance of your home loan to the existing lender.

2. Take an authorization document from the current bank as well as the remaining balance of the loan.

3. Present those records to the new bank to which you want to transfer the remaining amount of your mortgage.

4. The newly chosen financial institution will subsequently pay off your old financial institution’s balance.

5. As a result, the previous loan account will soon be officially abandoned, and all of your loan repayments must be submitted to the new financial institution.

Every single one of the property proofs as well as documentation will subsequently be turned over to the new banking institution, formally accomplishing the home loan transfer procedure.

What are the criteria for eligibility for a home loan balance transfer?

1. Age Limit: Between 23 and 65 years
2. Employment status: a salaried person or just a self-employed person
3. Residents of India as well as non-resident Indians

What kind of documents must be submitted for a home loan balance transfer?

1. Identity and address verification

2. Documents pertaining to the current loan

3. Salary slips for the previous three months

4. Bank statements for the previous six months

5. Balance sheets as well as statements of earnings and expenses for the previous three years (self-employed)

6. Photograph in passport size

Why is it necessary for you to have a home loan balance transfer?

1. Immediately following refinancing your home loan, the rate of interest can drop.

2. Either your EMI is going to drop while your tenure remains the exact same, or your EMI will rise while your tenure decreases.

3. This reduces the entire expense of the loan amount.

4. Whenever restructuring a home loan, the processing and transfer of balance fees have to be constantly considered.

5. However, the new banking institution’s rates of interest, along with these other costs, prove to be less expensive than the present loan rate if an individual makes the decision to repay the loan.

When and why should you use a home loan balance transfer?
Why does it matter?

1. A loan for a home transfer of balance may be utilised if a person continues to pay a greater amount of interest on his or her mortgage at a banking institution offering an interest rate that is lower.

2. If your financial institution refuses to lower its interest rate in spite of your friendly connection with the organization.

3. In case another bank offers a more reasonable rate of interest.

When can you go for a home loan balance transfer?

A home loan balance transfer is accessible between twelve and eighteen months after you’ve completely paid off your ongoing loan amount.

What Is the Distinctive Difference Between a Home Loan Balance Transfer and a Home Loan?

Home Loan: – A loan for a home is something that is obtained from a financial institution such as a bank for purchasing an apartment, land, building a property, or simply remodeling a current residence. To obtain a home loan, extensive documentation and evidence are necessary. Additionally, it becomes much more difficult to receive a home loan.

Home loan balance transfer: This pertains to the process of moving an ongoing home loan from a single banking institution to a different one. It is commonly referred to as refinancing, which allows a person to obtain more favourable rates of interest along with superior services. Meanwhile, compared to paying off a home loan, a housing loan balance transfer requires fewer records and is easier to obtain.

Home Loan Balance Transfer Frequently Asked Questions

  1. Is it a good idea to transfer your home loan balance?

It is preferable to pass on the loan whenever the total sum of the remaining debt is greater. The EMI for a home loan, similar to any other, comprises both the principal amount as well as the interest that is charged.

2. How repeatedly can I move my home loan balance?
You may transfer your home loan balance to another banking institution only after the lock-in period for your existing loan has expired. The time frame for a lock-in on a home loan usually ranges from 6 to 12 months. You may ask about the lock-in period through the lender from whom you obtained the loan.

3. What effect will a balance transfer have on CIBIL?
No, as long as you make your EMI payments on time after the remaining amount is transferred, your CIBIL is going to improve.

4. What is the shortest time it takes to transfer a home loan?
You can submit an application for a home loan balance transfer shortly after implementing regular repayments on your present loan for 12 to 18 months.

5. Can I get two home loans from the exact same banking institution?

Fortunately, there is currently no rule that prevents you from paying down a couple of home loans at the same time; this means that you’re permitted to possess as many loans on your house as are necessary within India.

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