What you need to know about Home Loan Balance Transfer

Home loans are very popular amongst people as they provide them with an option to spread out the whole cost of their homes over multiple EMIs. This not only helps you to own the property but also make it manageable. Home loans are a long-term commitment, and people should do proper research while choosing a loan provider.

 

Suppose a person applies for a loan at a bank, and later finds out about another bank providing lower interest rates, then, in this case, the person can transfer his home loan to the other bank from his current bank. The new company or bank will pay the original lender the outstanding sum of the loan, and the person will pay the remaining money to his new bank or company.

 

However, there are a few conditions to be met by the loan applicant before he is deemed eligible to transfer his bank loan. Here are some things to keep in mind about loan transfer.

 

·         How do I know if I am Eligible for a Home Loan Transfer?

For a person to be eligible for a loan transfer, he needs to have a good credit score. Also, if the person has paid a minimum of 12 Equated Monthly Instalments (EMI), he is eligible for a loan transfer. A person can keep his credit score clean to facilitate a smooth home loan transfer process.

 

·         How do I Apply for a Loan Transfer?

If in case a person is eligible for a loan transfer, he needs to file a new housing loan application to the new bank/company. Nowadays, many banks and companies also offer online application forms along with offline ones.

 

This dual approach makes it more convenient for a person to transfer loans. This step is essential, and one needs to first file a new application for a housing loan before transferring his home loan to another bank or company.

 

·         What Documents would I need while Applying?

While applying for a home loan transfer, you will need to submit some documents to the bank for verification purposes. Documents like your bank statements, your address proof, and identity proof will be required during the procedure.

 

Along with these, a few additional documents will also be required, like a photocopy of your residence/property, a letter by your current home loan lender stating documents they have with them, and the latest outstanding balance with the current lender.

 

·         Is Foreclosure of the existing loan necessary?

If a person is opting for a home loan transfer, after he is done with the formalities, it is important that foreclosure is done properly for the existing loan, wherein the new lending bank or company may make payments to the existing lender in order for them to release the person’s documents. These documents will now be acquired by the new lender until the person involved has paid off his remaining loan amount.

 

·         How do I Know if my Loan Transfer is Successful?

After finishing all the formalities with the existing lender and the newer one, a new home loan agreement is signed by the person and the institution. After this, the home loan transfer will have successfully been completed.

 

Home loan transfers are coming up to be popular approaches. However, it is important to keep an eye out for your requirements and assess if the transfer will actually result in savings or no. It is evident that if the cost of home loan servicing goes up after the transfer, then it won’t be worth carrying out this process at all.