In case of home loans, the amount borrowed is very high as compared to other type of loans. As the loan amount is high, the tenure given to repay the loan is also long as compared to that of a personal loan. However, the interest rates of home loans have seen a considerable change over a period of time. Hence, the old customers might see a difference in the interest rates provided to the new customers by the lenders. If you feel that you can get a better interest rate on your existing home loan with another loan provider, you can transfer your home loan balance to that bank or financial institute.
A home loan balance transfer is also called as refinancing of a home loan. You can refinance your home loan in two ways-
1. Apply for a new loan with the same loan provider.
2. Apply for a new loan with another loan provider who is offering more affordable interest rates
Generally, people prefer applying for a balance transfer with a new loan provider as the number of benefits availed with a new provider are more in terms of deciding the interest rate, loan tenure and the EMI amount. Once you apply for a balance transfer, all your existing home loan repayments will be settled by the new loan provider, while the old account with the previous provider will be closed.
Step 1: Carry out a cost-benefit analysis for your home loan balance transfer
Step 2: Get NOC from your current loan provider
Step 3: Apply for a balance transfer with the new loan provider
Step 4: Settlement of your existing home loan by the new loan provider
Step 5: Repayment of the new loan
Let us discuss each of these steps in detail.
a. The whole purpose of a home loan balance transfer is that you profit from the revised interest rates. In case you have agreed for a fixed interest on your existing home loan, your loan provider might charge a prepayment penalty for settling your loan balance early. Make sure you consider these charges before applying for a new loan with another bank/financial institute.
b. In case your home loan is taken on a floating interest rate, then transferring your home loan balance can prove profitable.
c. While interest rates are the major reasons for a balance transfer, make sure you also consider other factors such as loan tenure, repayment options, processing fees, etc. before applying for a new loan. You can use the Bajaj Finserv EMI calculator to estimate the amount that you will have to pay on your new loan.
d. Only when you analyze all these cost-benefit values, should you proceed with your home loan balance transfer.
a. Once you decide on transferring the balance on your existing home loan, search for a loan provider that offers affordable interest rates for loan refinancing.
b. Once you make your choice on the loan provider, you will have to get a NOC (no-objection certificate) from your current loan provider for initiating the home loan balance transfer process.
c. Along with the NOC, you will also need to get documents like foreclosure letter, proof of past EMI payment history, copy of loan agreement papers with the loan provider, etc.
d. Make sure that you submit a request for getting these documents at the earliest, as the time taken to get these documents may take anywhere between 1-3 weeks.
a. Once you get all the necessary documents in hand, you can proceed to apply for a balance transfer with the new loan provider
b. The application process will differ from bank to bank. However, the basic application steps remain the same. For instance, to apply for a Bajaj Finserv home loan transfer all you have to do is follow these simple steps-
1) Enter your personal and employment details
2) Estimating the amount that you can borrow for your balance transfer
3) Mention requirement and property details
4) Unlock your final loan eligibility amount
5) Verification and Disbursement of the money in your account
a. Once you complete the application process, the new loan provider will evaluate your application and decide on your eligibility.
b. Factors such as the required amount for home loan balance settlement, your past credit history, and present financial condition will be taken into consideration while determining your home loan balance transfer eligibility.
c. Once you pass the eligibility criteria, the loan amount would be credited to your account.
d. You can repay the entire outstanding balance of your existing home loan with the new loan amount credited in your account
a. While the existing debt on your home loan is cleared because of the balance transfer, do not forget that you still have to repay your new loan.
b. However, since the amount and interest rates on the new loan are chosen by keeping your repayment convenience in mind, paying off the EMIs on the new loan should not be an issue.
For more details on home loan balance transfer, get in touch with us at Finserv Markets. The Bajaj Finserv home loan balance transfer facility can be availed at nominal interest rates, with no extra need for document verification. What’s more? You can get your home loan balance transfer application processed online and approved under just 3 minutes. Once approved, the loan amount will get credited to your bank account within 24 hours! For customized easy loan options with guaranteed 100% transparency, apply for Bajaj Finserv Home Loan Balance Transfer with us, today!
Finserv Markets, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!