Refinance Home Loan @8.40%*
Lower EMIs, Higher Savings!!

Home Loan Balance Transfer (HLBT) is refinancing or switching of your existing Home Loan to a new lender. Using HLBT facility you can transfer Home Loan Balance to the new lender and avail of benefits such as lower Home Loan interest rate, affordable or readjusted EMIs, increase/decrease loan tenure and/or top up to 100% of Home Loan. Most lenders readily approve the balance transfer applications at lower rates because it is profitable and low risky to welcome customers already having a good repayment history. In the last one year maximum Home Loan Balance Transfer requests are made due to historic corrections in Home Loan Interest rates. The Home Loans (linked to repo rates) are available at lowest of 8.50% interest rate for 30 years. It is best to opt for Home Loan Transfer in the initial years, when your interest liability is high.

Let’s dig deep into the process of Home Loan Balance Transfer and understand how it works.

• The takeover of the outstanding Home Loan balance from the existing lender is treated as a fresh loan by the new lender.
• Just like a new loan, the lender will assess stability of income, credit score, and KYC verification. A prescribed application for the balance transfer should be submitted to the existing lender.
• The panel advocate and the panel valuer of the new lender will undertake scrutiny of property documents and property valuation.
• The transfer of balance will be allowed by the existing lender only after the loan has run for a minimum period as prescribed at the time of loan approval. Until then, the No Objection Certificate (NOC) will not be issued by the lender.
• The new lender will treat the balance transfer like a fresh loan and hence processing charges will be collected at the prescribed rate, which ranges from 0.5% to 1% of the loan amount.
• On transfer of the outstanding balance subsequent EMI becomes payable to the new lender.

The eligibility criteria for the Home Loan Balance Transfer are similar to that of a home loan. The factors for eligibility can be listed as:

• Existing Loan: The applicant should be serving a Home Loan from RBI registered bank/ NBFC. The lender will also assess payment history of EMIs.
• Age: Applicants for HLBT should be between 21 to 60 years of age. The criteria may slightly vary for self employed individuals with age relaxation up till 65-70 years.
• Occupation: Salaried, self-employed, professionals as well as business owners can apply.
• Co-applicants: Up to 3 co-applicants can be added.
• Income: The minimum income should be Rs 15000. However the criteria will vary across the lenders.
• Experience: Even for HLBT, your business/ job continuity will matter. Experience of at least 2-3 years with the present employer and business vintage of 3 years with 2 years of profit-making period are considered.
• Credit Score: The credit score should be above 650. In case the CIBIL Score has declined from score assessed previously at the time of availing of existing Home Loan & is not as per lender’s credit policy, the balance transfer request can be rejected.
• Debt to income ratio of 40% to 50% should be complied with.
• LTV: Up to 90% of property value and as per lender’s credit policy.

A Home Loan Balance Transfer account is akin to a Home Loan account and thus fees and charges are similar to a Home Loan account. When you apply for balance transfer, the bank will levy processing fees and administrative charges. Further, penal charges and prepayment charges will also be applicable. Overall Home Loan Balance Transfer charges will vary as per the lender’s policy.

Most banks & NBFCs follow rates as under:

• Processing fee will range from 0.5% to 2% of the loan amount.
• Penal charge will be up to 2% of outstanding per month.
• Foreclosure charges will be up to 4% of the prepaid amount.

Home Loan Balance Transfer or refinancing switches your Home Loan to a new lender. You should take due diligence to ensure best saving and maximum benefits of transferring the loan. We have outlined step by step process to ease the loan transfer journey below-

How to transfer home loan from one bank to another?

1. Pre-steps: First things first, make sure you have shortlisted the new lender for right reasons. Do your maths & calculate the savings.
2. Contact existing lender: Submit an application/ form for Balance transfer and share reasons for the switch.
3. Obtain NOC: After reviewing your application, the bank will share NOC or Consent Letter. The new lender will start the balance transfer only after your submit this document.
4. Submit documents to the new lender. After obtaining NOC, submit all the necessary documents to the new lender. Besides KYC & property documents, the lender will also access documents validating Home Loan Balance such as interest statement and loan statement. 
5. Takeover: The new lender will take over the loan balance and repay the outstanding loan amount to the old lender. The bank will submit all property documents to new lender and confirm the same to you.
6. Sign the agreement & pay processing fee & other charges. On approval of the take-over, obtain a sanction letter from the new lender and read the terms and conditions to ensure that there are no hidden charges.

The new lender will make a new home loan agreement including updated loan amount with top up (if requested), interest rate, schedule of EMIs, fees & charges. Sign the loan agreement and pay out applicable fees and charges.

The disbursal will be made by way of a cheque or draft or through RTGS directly into the existing Home Loan account.

rom next month, the EMIs will be due to the new lender as per the newly framed agreement.

There is no one-size-fits-all product. So choose the Best Home Loan Transfer offer according to your specific needs. If the new lender’s offer fulfils any of the following, it is likely to be a perfect match for you:

1. Lower rate of interest- In maximum cases, people opt for balance transfer for lower interest rate. You may consider negotiating with the existing bank for refinancing your loan or opt for a new lender who is willing to offer a lower rate. Make sure the difference in rate after the switch is at least 50 bps. The higher is the difference, higher will be the saving.
2. Better post disbursal service- If your existing bank has rigid terms and you are seeking better customer service and ease of loan repayment, make sure you read new lender’s terms carefully besides reading customer reviews.
3. Lower EMIs- Discuss the new EMI plan and calculate the saving. Make sure you do not increase overall interest burden on your Home Loan.
4. Top Up- If top is what you are looking for, do explore the top-up option with your current lender. Compare the offer with a new lender and only make a decision after a thoughtful comparison.
5. Repayment flexibility- There is no foreclosure charge on Home Loan prepayment. However sometimes, there could be lock-in or limit on the amount that can be pre-paid for free. So make sure you carefully assess what kind of repayment flexibility you are seeking for from the new lender.

Choose the lender after proper deliberation. The above checklist will help you. Top banks for best Home Loan Balance Transfer are HDFC Bank, Axis Bank, Kotak Mahindra, ICICI Bank and SBI Bank.

You can use Home Loan Balance Transfer Calculator to understand the saving with switching of Home Loan lender. Submit old bank & new bank’s Home Loan Balance Transfer Interest Rates, tenure & loan amount to calculate the EMIs & tentative savings.

Let’s check the saving per month on EMI, using Home Loan Balance Transfer Calculator for different loan amounts. For calculation, we will take common Home Loan Interest Rate and a fixed tenure of 10 years.

Opt for balance transfer in following situations:

1.  When interest rates are falling & you are eligible to get lower rate by switching your Home Loan Scheme. Eg. from MCLR to repo linked Home Loan.

2.  When you have a financial crunch, and/or you want to avail of a Top Up and/ or want to adjust EMIs or Tenor as per your current cash flows.

3.  When you are looking for some specific features which your present lender is not offering.

However in any case, do not forget to compare Home Loan Balance Transfer offers from different lenders. Compare Home Loan Interest Rates and attached fees such as processing fees, foreclosure charges, penal charges etc. You can easily compare the loans online on our website. Online Home Loan Balance Transfer process is fast, reliable and hassle free.

A Home Loan Balance Transfer (HLBT) account works like a regular Home Loan Account only. You only switch your lender, but other obligations such as interest rate payment and EMI burden will continue as per the new terms. First you should share HLBT application to the current lender and obtain an NOC. Submit Consent letter to the new lender to begin the balance transfer. The new lender will take over the loan and property documents. The Home Loan Balance Transfer process is simple, fast and pocket friendly.

It is good to apply for Balance Transfer of Home Loan when you have a lower rate Home Loan offer from another lender. The difference in interest rate should be at least 60-100 bps for substantial savings. It is mostly beneficial for MCLR linked loans to switch to repo linked loans, especially in falling rate market. However, if you already you have a repo linked home loan, your lending rate will be revised as per the benchmark rate in next three months. However if you have improved your profile and the lenders are willing to offer you better rates, you should opt for Balance Transfer. Other benefits could be revised EMI plans, repayment flexibility, post disbursal facilities etc.

Currently Kotak Mahindra Bank is offering the lowest Home Loan Transfer rate in India. However, interest rate is not the only criteria to choose the lender. Compare processing fees, penal charges, late payment fee and post disbursement services before finalising the lender. Top lenders for Home Loan Balance Transfer are: SBI, HDFC, Axis and ICICI Bank. Top NBFCs for HLBT in India are: Bajaj Finserv, Tata Capital, and HDFC Housing.

No, guarantor is not required to apply for a Home Loan Transfer. In a Mortgage, Home Loan, or LAP, the property in concern serves as the loan collateral and thus bank do not ask for a guarantor.

There is no limit placed on balance transfer. However, the final terms always vary as per the bank’s credit policy. The amount of loan transfer will be approved basis your income, previous repayment history, credit score and LTV.

It may take 1 to 2 weeks to complete the Home Loan Transfer Process. The transfer requires communication with two different lenders and thus the process would not be as fast as a new Home Loan. You should use professional loan service like MyMoneyMantra to get the shortest possible turnaround time & the best offer.

Well, a person opting for balance transfer can certainly apply for PMAY, provided s/he has not used the benefit under scheme before. The PMAY subsidy will be extended only once in the lifetime.

You require to furnish basic KYC documents—identity and address, Income Proof and Property Documents. A quick list would include: Aadhar card, Passport/ Voters ID/ Driver’s License, last 3 months’ Salary slips, past months bank statements showing salary credits, Form 16 and IT returns, property documents, Outstanding balance letter and No objection certificate from previous lender.