Home Loan Balance Transfer

A home loan balance transfer enables you to transfer your current loan obligation from one lender to another. Ideally, you opt for this facility when you can avail a home loan at affordable interest rates from another lender.

You can refinance your home loan by checking if you meet the new bank’s eligibility criteria once you know that switching your loan can reduce your repayment burden. Then you can apply for a balance transfer once you get a No Objection Certificate from your existing lender. Then pay the applicable charges once your application is approved and you are done.

Consider transferring your outstanding debt to another lender if you are getting a better rate of interest on the remaining loan amount. Make sure you study all the costs involved and then transfer your home. This facility is usually more feasible in the first half of your repayment tenure when your EMI’s interest component is higher. 

There is no capping as such. You can transfer the entire outstanding home loan amount to a different lender, depending on the loan terms you are offered.

Yes, you can get a top-up from the same financial institution when you opt for the home loan balance transfer. Remember, interest rates on the top-up facility may be slightly higher than the home loan interest rate.

Yes, you can extend your repayment period when opting for a home loan balance transfer. However, note that at the time of loan maturity, your age cannot exceed 62 years if you are a salaried individual. As a self-employed borrower, your age must not exceed 70 years.

A majority of Indian lending institutions do not ask for a guarantor while taking over an existing home loan. However, it is entirely upon the new lender to decide whether or not a guarantor is required when you avail the home loan balance transfer facility.

When applying for a home loan balance transfer, you can enjoy an extended period of up to 30 years. This also depends on the new lender you choose.

You can enjoy the same tax benefits on your home loan repayment even after you complete a balance transfer. This includes a tax exemption on the home loan interest as well as the principal. However, when you take a top-up loan during a home loan balance transfer, you can only enjoy tax savings based on the end use of the funds.

You should only go for a home loan balance transfer facility when the interest rate is lower. This way, you can save as you repay your remaining home loan.

As per the RBI guidelines for home loan balance transfer charges, you do not need to pay foreclosure charges on home loan with floating interests during the transfer. For a home loan with fixed interest, you may pay a fee up to 3% of the outstanding loan amount. However, lenders may choose to forego this and charge you a more affordable switchover fee. 

You avail a home loan to construct a new house on an existing property or purchase a residential property such as a house, apartment or land. On the other hand, a home loan balance transfer means transferring your existing home loan from your present lender to a new lender. The usual reason for this is to get better interest rates from the other lender.

A balance transfer can positively and negatively impact your credit score. When the new lender conducts a credit inquiry, your credit score may dip slightly. However, transferring the outstanding loan amount to a new lender may lower your credit utilisation ratio and boost your credit score. As the interest charged on your new loan is affordable, you can pay your monthly instalments on time without burdening your monthly finances. Timely repayment helps improve your credit score while missing EMIs lowers it.