Best Banks for Home Loan Balance Transfer

Last Updated : Sept. 24, 2024, 1:34 p.m.

The long tenure and the rising interest rates in home loans also offer you a couple of chances to shift your balance from one lender to another. But this can be confusing as there are a number of banks coming to you with balance transfer offers, and it is difficult when you try to understand which bank should you transfer your loan from.

When opting for a home loan balance transfer, opt for the best among banks to increase chances of receiving lower interest rates that are 0.25% to 1% lesser than your current rate, low processing fees and hassle-free processing. Here, we are listing the most beneficial banks for home loan transfers based on these parameters.

Best Home Loan Balance Transfer Rates

The interest rates for transferring a home loan balance usually depend on how lenders view a borrower's credit details, such as their credit score, age, job, and who they work for. Most of the time, these rates are the same as the usual home loan interest rates . However, some banks may offer special rates for transferring your loan.

The table below provides the rates from some top banks and housing finance companies in India for transferring a home loan.

How to Apply for a Home Loan Balance Transfer?

To apply for the best home loan balance transfer, an existing home loan borrower should follow the below-given steps:

• Visit the bank’s website.
• Review all terms, interest rates, and processing fees.
• If the terms are agreeable, proceed to apply for the balance transfer.
• Fill out the application with the required details such as your name, property type, current loan tenure, and current bank’s name.
• After submitting, you’ll be able to see your loan offer.
• Pay any necessary fees and submit your documents.
• Finish the application and wait for approval.

Get a Rough Estimate of the Savings You Could Make With a Home Loan Balance Transfer

Whatever lender you choose, it’s advisable to first use the home loan EMI calculator and learn about the savings on offer . It is quick, accurate, and convenient for anyone to use. All you have to do is enter the transferred loan amount, the interest rate offered by the new lender, and the time for which you continue to service the transferred balance. It will show you the new EMI and interest payable over the chosen time period. Compare the current EMIs and interest payable till now to get a fair idea of which lender to choose for the balance transfer.

The calculator uses the below formula to calculate an EMI.

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

where,

EMI = Equated Monthly Installment

P = Principal Loan Amount

R = Monthly Interest Rate

N = Number of Monthly Installments

Let’s understand with the example given in the table below:

Advantages Of Applying For A Home Loan Balance Transfer

Like any other financial product home loans are subject to change, so if you took out a loan five years ago it might be time to consider refinancing your mortgage.

Lower Interest Rate: Most of the time people getting home loans for the first term are charged higher interest rates because either their loan eligibility is low or they have a bad credit profile. Likewise, as they maintain financial discipline and boost their score over the years, they could be eligible for loans with lower interest rates.

Maximum Tenure: Most banks when you transfer a loan balance give an option of an extended repayment period which is longer than what remained on your original loan. This can decrease the monthly bill amount (EMIs), so it is easier to handle it, but increases the overall interest paid over time.

Top-up Loan: Borrowers transferring their home loan balance also get a top-up loan . This additional borrowing is free of restrictions on its spending. Top-up loan quantum may vary between lenders and also based on the eligibility of the borrower.

Other Benefits: It can also bring additional benefits, such as EMI waivers, zero processing fees, and improved loan terms.

Eligibility Criteria Required for Home Loan Balance Transfer

• Property Status : Your property should be ready to move into or already occupied.
• Loan Payments : You must have paid at least 12 EMIs on your current home loan.
• Outstanding Dues : There should be no outstanding dues on your existing loan.

Additional Requirements:

• Age : You must be between 23 and 65 years old.
• Employment : You can be salaried or self-employed.

Nationality : This option is available to both resident Indians and Non-Resident Indians (NRIs).

Documents Required for Home Loan Balance Transfer

Below are the key documents required to apply with the best bank to transfer home loan:

KYC Documents

• PAN Card
• Aadhaar Card
• Proof of Residence

Proof of Income

• For salaried individuals: Recent salary slips and Form 16
• For self-employed individuals and professionals: Income Tax Returns (ITR) for the last three years along with financial statements
• Bank statements from the last six months for all applicants.

Additional Documents:

• The most recent statement showing the outstanding principal amount
• A list of documents held by the current financier
• A record of your loan repayment history.

Conclusion

With this curated list of reputable lenders, you're well-equipped to make an informed decision regarding your home loan balance transfer. Remember, balance transfer terms can vary, so it's advisable to review the current offers periodically. Wishfin can assist by offering comprehensive comparisons and personalized recommendations to help you select the best lender for your financial needs.