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How to make a home loan balance transfer work for you

Enjoy a shorter tenure and a positive impact on your credit score

By identifying a with a competitive interest rate, you can transfer your existing Home for greater savings. You can even enjoy a shorter tenure and a positive impact on your  

“Should I have opted for a different for my Home Does it make sense to transfer the balance of my to another Can I take advantage of better interest rates prevalent today?”

These are just some of the questions that are faced by every home owner at least once in their repayment journey. There are a number of benefits you are likely to gain when you choose for a balance transfer. But before we come to that, let us first understand what exactly is a Home balance transfer.

Home Balance Transfer

The transfer of your existing Home account from your to another bank or non-banking financial company (NBFC) is called the Home Balance Transfer. 

People usually choose to go for this process if they find another offering a lower or better service. But you should remember to carefully consider all the costs involved and the prospective savings before availing a balance transfer.

How to Make a Home Loan Balance Transfer Work for You

The savings associated with a lower rate of interest is the primary reason to choose a transfer to another lender. After all, a Rupee saved is a Rupee earned.  

10 Steps that Make up the Home Balance Transfer Process

  1. Study the Market: Look for lenders that are offering lower rates than your current bank or Consider offers and incentives for transfers. You may just find yourself a great deal.  
  2. Gather your Documents: Once you’ve identified the you wish to transfer to, start by gathering your paperwork. This includes your property documents (registration, stamp duty payments), your sanction letter and your present agreement. The new will also want an income proof, your bank statement, and copies of your IT returns. This process is almost like making a fresh proposal.  
  3. Prepare for Verification: The new will now verify all your details including your Sometimes, the may run a physical inspection of your property too. 
  4. Seek Approval from New Lender: Once the new is satisfied with your documents, the next step will be the approval of your balance transfer application.
  5. Seek Approval from your Existing Lender: This is the time to approach your existing You need to submit a formal application for the transfer and ask for a consent letter or a no-objection certificate. It will also provide details of the outstanding amount and payments made so far.  
  6. Submit the Consent Letter: Next, submit the consent letter from your current to the new one. You will also have to submit another application to the new (along with the consent letter). The new will need this to cover the outstanding amount of your  
  7. Draw the Agreement: Draft your agreement with the new You will now receive a formal letter sanctioning the  
  8. Confirm the Payment of the Balance: Verify the payment of the balance amount to the old  
  9. Check for property document transfer: After this payment, the old will transfer your property documents to the new one. 
  10. Keep a Provision for Interim Security: Some lenders may ask for an interim security to be deposited with them for the period between the payment of the old and the transfer of property documents to the new This is usually refundable 

Currently, there are no prepayment penalties for the foreclosure of floating rate loans. But fixed-rate borrowers have to pay a penalty on the prepayment of Home Loans. 


Things to Consider Before a Home Transfer

It is very important that you study the process before you look at transferring your Home Keep these things in mind:

See the actual rate that you are getting. Find out if the lender’s rates depend on the base rate or on the marginal cost of funds-based lending rate (MCLR). It will be lower in the case of the latter.

Check out the alternative to transferring your You could try negotiating with your existing to reduce the rates. Do you still have a good 10 years remaining on your tenure? If you have been regular with your payments, your may consider your request. It might grant an reduction. It is worth exploring this option before you rush to a new lending institution. 

Is the new trying to make you agree to a longer tenure? This is a bad idea even if the rate is low. You will end up paying more interest over a longer tenure. So, take advantage of the reduced rate. Reduce your repayment period and repay the faster. 

Estimate the costs associated with the transfer. There will be a processing fee, a stamp duty, and legal charges. Lenders also have technical charges, and verification and valuation charges. How much does it all add up to? Does it compare favourably with the benefits you get from the reduced rate? There may not be any prepayment penalties. But your existing may still penalise you for shifting your elsewhere.

See how much of your tenure is remaining. Do you have only about five years of the tenure remaining? Have you repaid a major portion of the capital? Then your collateral (your house) is now worth more than the you are negotiating for. Take advantage of this. Ask for a lower It is within your rights to do so. 

The Bottom Line

Take a long careful look at all the benefits you are likely to get before deciding on the transfer of your Home Also, study all the charges associated with the process.

NBFCs such as offer a number of benefits including customised insurance solutions as well as EMI Holiday feature – allowing you to plan your finances better. You can visit the lender’s website and initiate the process at your own convenience. You can use a Home Balance Transfer Calculator to  assess your actual savings when you transfer to the new

(This story has not been created or edited by Business Standard editorial staff.)

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How to make a home loan balance transfer work for you

Enjoy a shorter tenure and a positive impact on your credit score

Enjoy a shorter tenure and a positive impact on your credit score
By identifying a with a competitive interest rate, you can transfer your existing Home for greater savings. You can even enjoy a shorter tenure and a positive impact on your  

“Should I have opted for a different for my Home Does it make sense to transfer the balance of my to another Can I take advantage of better interest rates prevalent today?”

These are just some of the questions that are faced by every home owner at least once in their repayment journey. There are a number of benefits you are likely to gain when you choose for a balance transfer. But before we come to that, let us first understand what exactly is a Home balance transfer.

Home Balance Transfer

The transfer of your existing Home account from your to another bank or non-banking financial company (NBFC) is called the Home Balance Transfer. 

People usually choose to go for this process if they find another offering a lower or better service. But you should remember to carefully consider all the costs involved and the prospective savings before availing a balance transfer.

How to Make a Home Loan Balance Transfer Work for You

The savings associated with a lower rate of interest is the primary reason to choose a transfer to another lender. After all, a Rupee saved is a Rupee earned.  

10 Steps that Make up the Home Balance Transfer Process

  1. Study the Market: Look for lenders that are offering lower rates than your current bank or Consider offers and incentives for transfers. You may just find yourself a great deal.  
  2. Gather your Documents: Once you’ve identified the you wish to transfer to, start by gathering your paperwork. This includes your property documents (registration, stamp duty payments), your sanction letter and your present agreement. The new will also want an income proof, your bank statement, and copies of your IT returns. This process is almost like making a fresh proposal.  
  3. Prepare for Verification: The new will now verify all your details including your Sometimes, the may run a physical inspection of your property too. 
  4. Seek Approval from New Lender: Once the new is satisfied with your documents, the next step will be the approval of your balance transfer application.
  5. Seek Approval from your Existing Lender: This is the time to approach your existing You need to submit a formal application for the transfer and ask for a consent letter or a no-objection certificate. It will also provide details of the outstanding amount and payments made so far.  
  6. Submit the Consent Letter: Next, submit the consent letter from your current to the new one. You will also have to submit another application to the new (along with the consent letter). The new will need this to cover the outstanding amount of your  
  7. Draw the Agreement: Draft your agreement with the new You will now receive a formal letter sanctioning the  
  8. Confirm the Payment of the Balance: Verify the payment of the balance amount to the old  
  9. Check for property document transfer: After this payment, the old will transfer your property documents to the new one. 
  10. Keep a Provision for Interim Security: Some lenders may ask for an interim security to be deposited with them for the period between the payment of the old and the transfer of property documents to the new This is usually refundable 

Currently, there are no prepayment penalties for the foreclosure of floating rate loans. But fixed-rate borrowers have to pay a penalty on the prepayment of Home Loans. 


Things to Consider Before a Home Transfer

It is very important that you study the process before you look at transferring your Home Keep these things in mind:

See the actual rate that you are getting. Find out if the lender’s rates depend on the base rate or on the marginal cost of funds-based lending rate (MCLR). It will be lower in the case of the latter.

Check out the alternative to transferring your You could try negotiating with your existing to reduce the rates. Do you still have a good 10 years remaining on your tenure? If you have been regular with your payments, your may consider your request. It might grant an reduction. It is worth exploring this option before you rush to a new lending institution. 

Is the new trying to make you agree to a longer tenure? This is a bad idea even if the rate is low. You will end up paying more interest over a longer tenure. So, take advantage of the reduced rate. Reduce your repayment period and repay the faster. 

Estimate the costs associated with the transfer. There will be a processing fee, a stamp duty, and legal charges. Lenders also have technical charges, and verification and valuation charges. How much does it all add up to? Does it compare favourably with the benefits you get from the reduced rate? There may not be any prepayment penalties. But your existing may still penalise you for shifting your elsewhere.

See how much of your tenure is remaining. Do you have only about five years of the tenure remaining? Have you repaid a major portion of the capital? Then your collateral (your house) is now worth more than the you are negotiating for. Take advantage of this. Ask for a lower It is within your rights to do so. 

The Bottom Line

Take a long careful look at all the benefits you are likely to get before deciding on the transfer of your Home Also, study all the charges associated with the process.

NBFCs such as offer a number of benefits including customised insurance solutions as well as EMI Holiday feature – allowing you to plan your finances better. You can visit the lender’s website and initiate the process at your own convenience. You can use a Home Balance Transfer Calculator to  assess your actual savings when you transfer to the new

(This story has not been created or edited by Business Standard editorial staff.)

image
Business Standard
177 22

How to make a home loan balance transfer work for you

Enjoy a shorter tenure and a positive impact on your credit score

By identifying a with a competitive interest rate, you can transfer your existing Home for greater savings. You can even enjoy a shorter tenure and a positive impact on your  

“Should I have opted for a different for my Home Does it make sense to transfer the balance of my to another Can I take advantage of better interest rates prevalent today?”

These are just some of the questions that are faced by every home owner at least once in their repayment journey. There are a number of benefits you are likely to gain when you choose for a balance transfer. But before we come to that, let us first understand what exactly is a Home balance transfer.

Home Balance Transfer

The transfer of your existing Home account from your to another bank or non-banking financial company (NBFC) is called the Home Balance Transfer. 

People usually choose to go for this process if they find another offering a lower or better service. But you should remember to carefully consider all the costs involved and the prospective savings before availing a balance transfer.

How to Make a Home Loan Balance Transfer Work for You

The savings associated with a lower rate of interest is the primary reason to choose a transfer to another lender. After all, a Rupee saved is a Rupee earned.  

10 Steps that Make up the Home Balance Transfer Process

  1. Study the Market: Look for lenders that are offering lower rates than your current bank or Consider offers and incentives for transfers. You may just find yourself a great deal.  
  2. Gather your Documents: Once you’ve identified the you wish to transfer to, start by gathering your paperwork. This includes your property documents (registration, stamp duty payments), your sanction letter and your present agreement. The new will also want an income proof, your bank statement, and copies of your IT returns. This process is almost like making a fresh proposal.  
  3. Prepare for Verification: The new will now verify all your details including your Sometimes, the may run a physical inspection of your property too. 
  4. Seek Approval from New Lender: Once the new is satisfied with your documents, the next step will be the approval of your balance transfer application.
  5. Seek Approval from your Existing Lender: This is the time to approach your existing You need to submit a formal application for the transfer and ask for a consent letter or a no-objection certificate. It will also provide details of the outstanding amount and payments made so far.  
  6. Submit the Consent Letter: Next, submit the consent letter from your current to the new one. You will also have to submit another application to the new (along with the consent letter). The new will need this to cover the outstanding amount of your  
  7. Draw the Agreement: Draft your agreement with the new You will now receive a formal letter sanctioning the  
  8. Confirm the Payment of the Balance: Verify the payment of the balance amount to the old  
  9. Check for property document transfer: After this payment, the old will transfer your property documents to the new one. 
  10. Keep a Provision for Interim Security: Some lenders may ask for an interim security to be deposited with them for the period between the payment of the old and the transfer of property documents to the new This is usually refundable 

Currently, there are no prepayment penalties for the foreclosure of floating rate loans. But fixed-rate borrowers have to pay a penalty on the prepayment of Home Loans. 


Things to Consider Before a Home Transfer

It is very important that you study the process before you look at transferring your Home Keep these things in mind:

See the actual rate that you are getting. Find out if the lender’s rates depend on the base rate or on the marginal cost of funds-based lending rate (MCLR). It will be lower in the case of the latter.

Check out the alternative to transferring your You could try negotiating with your existing to reduce the rates. Do you still have a good 10 years remaining on your tenure? If you have been regular with your payments, your may consider your request. It might grant an reduction. It is worth exploring this option before you rush to a new lending institution. 

Is the new trying to make you agree to a longer tenure? This is a bad idea even if the rate is low. You will end up paying more interest over a longer tenure. So, take advantage of the reduced rate. Reduce your repayment period and repay the faster. 

Estimate the costs associated with the transfer. There will be a processing fee, a stamp duty, and legal charges. Lenders also have technical charges, and verification and valuation charges. How much does it all add up to? Does it compare favourably with the benefits you get from the reduced rate? There may not be any prepayment penalties. But your existing may still penalise you for shifting your elsewhere.

See how much of your tenure is remaining. Do you have only about five years of the tenure remaining? Have you repaid a major portion of the capital? Then your collateral (your house) is now worth more than the you are negotiating for. Take advantage of this. Ask for a lower It is within your rights to do so. 

The Bottom Line

Take a long careful look at all the benefits you are likely to get before deciding on the transfer of your Home Also, study all the charges associated with the process.

NBFCs such as offer a number of benefits including customised insurance solutions as well as EMI Holiday feature – allowing you to plan your finances better. You can visit the lender’s website and initiate the process at your own convenience. You can use a Home Balance Transfer Calculator to  assess your actual savings when you transfer to the new

(This story has not been created or edited by Business Standard editorial staff.)

image
Business Standard
177 22