Home Loan Balance Transfer

Apply for a home loan balance transfer at Bajaj MARKETS and get attractive interest rates starting from just 6.99% p.a. with a repayment tenure of up to 30 years. The processing fee on balance transfer ranges between 0.25% and 2% of the loan amount. You can also calculate your loan EMI with our home loan balance transfer EMI calculator.

What is a Home Loan Balance Transfer?

Home Loan Balance Transfer essentially enables borrowers to transfer their current loan obligations from one lender to another. Ideally, borrowers opt for Home Loan Balance Transfer facilities when an additional lender enters the orbit by offering a much more competitive rate of interest to them. On top of that, they are doing so on the very same loan that the individual in question is currently repaying to the bank that they took the loan from.

Now that you have received an overview of what a Home Loan Balance Transfer is, let us take a look at what are the applicable fees and charges on Home Loan Transfer solutions. What you will find below is the list pointing out all sorts of fees and additional charges that are levied by financial institutions while processing your Home Loan Balance Transfer application and other circumstances. Read on to know more.

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*The interest rates and associated charges can vary from one lending partner to the other and are subject to policy changes of the partner.

Home Loan Balance Transfer Features and Benefits

• Low Interest Rates: The most immediate and obvious benefit of getting your home loan balance transferred is the lower interest rate that you will have to pay, reducing your overall monthly home loan EMI outflow.

• Flexible Repayment Tenure: Repay your loan over a flexible repayment tenure ranging up to 360 months.

• Loan Top-Up Facility: You can avail a top-up facility along with a balance transfer option. No extra documentation is needed.

Home Loan Balance Transfer Fees and Charges

Before applying for Home Loan Balance Transfer, one must take into consideration the below mentioned Fees and Charges:

• Home Loan Transfer Processing Fees: As the name suggests, this fee is collected by the relevant financial institutions at the time of them processing the documents for home loans. Depending on the size of the amount that is yet to be repaid, your new lender can charge anywhere between ₹8,000-₹18,000 upfront. However, it must be noted that some of the Indian banks and financial institutions do not charge a single penny for the same.

• Foreclosure charges: If a borrower wishes to repay all of his or her debt way before the end of the loan repayment tenure, depending upon the amount that is remaining, the bank may charge them a small fee in order to make up for all of the interest they could have made had the loan repayment tenure been adhered to. Typically, the foreclosure charges do not exceed a total of 4% of the outstanding amount. Some of the banks do not even levy foreclosure charges at all, which is one of the motivations behind a borrower having their Home Loan Balance transferred.

• EMI Bounce Charges: It is possible at times that a borrower may not be able to pay a particular instalment on time or the cheque through which the Home Loan EMI was being honoured ends up bouncing. In such a scenario, the bank levies what is known as the EMI Bounce Charges. However, it is not a mandatory charge and some banks do not choose to add the burden of the same on the borrower either.

• Penal Interest Rate: If the borrower chooses to pay the EMI of their respective home loan on a later date, the bank sometimes charges what is known as a penal interest rate instead of levying the standard EMI bounce charges. The penal interest rates charged by banks and financial institutions tend to start at 2% for every month the EMI in question is overdue.

• Convenience Fees: At times, the lending institution levies an additional form of fee for the benefits that the borrower will receive should they have their Home Loan Balance transferred to them. This is sometimes charged in addition to the Home Loan Processing Fee or in its replacement. One must take either one of those or both the charges into consideration while thinking about having their Home Loan Balance Transfer in order to assess whether or not the switch would be a lucrative endeavour.

Home Loan Balance Transfer Eligibility Criteria

The borrower must ensure that they meet the Home Loan Balance Transfer Eligibility Criteria that is the bare minimum for almost all of the lenders that have set up operations in India

How to Apply for a Home Loan Balance Transfer

Below mentioned is the process for applying for a Home Loan Balance Transfer:

• Step 1: Provide your personal, financial. and employment details.

• Step 2: Enter your required loan amount and details of the existing property.

• Step 3: You will finally get to know the loan eligibility amount.

• Step 4: Submit your property loan document.

• Step 5: Pay the secure fee online.

Documents Required for Home Loan Balance Transfer

• In the case of salaried individuals, they must furnish their latest salary slips going back at least 3 months or Form 16.

• In the case of self-employed individuals, the applicant must furnish their audited profit and loss statements.

• Last 6 months bank account statements

• PAN Card/Aadhaar Card

• Address proof

• KYC Documents

• Identity Proof

• Photograph

How to Calculate EMI on Home Loan Balance Transfer

The Home Loan Balance Transfer EMI amount that you have to pay to the new lender after having transferred your home loan depends upon the following factors:

• The outstanding principal amount of the home loan.

• The EMI is paid to the current lender every month.

• The current outstanding tenure of the loan- number of months/years of the loan tenure remaining.

• The interest rate of the new lender.

For Example, let’s say you wish to transfer a home loan with the current outstanding principal amount of ₹30,00,000, current monthly EMI of ₹30,000 and remaining tenure of 20 years (240 months). If the new lender is offering an interest rate of 6.90% per annum, your EMI, after the balance transfer, will reduce to ₹23,079 per month, which means, you will be saving ₹6,921 every month and ₹16,37,040 in total.

Difference Between Home Loan and Home loan Balance Transfer

• Home Loan: A home loan is availed to purchase a new residential property such as a house or an apartment or land. You can also apply for a home loan to construct a new house on an existing real estate. Home loans are usually secured loans and a lot of documentation is required for applying for a fresh home loan.

• Home Loan Balance Transfer: It means transferring your existing home loan from your present lender to a new lender. Usually, borrowers consider a home loan balance transfer to save their money when they are getting a better interest rate from the other lender. Once the transfer process is complete, you owe the outstanding loan amount to your new lender. Since your loan application has already been approved by your present lender, a lot less documentation is required for a home loan balance transfer.