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Home Loan Balance Transfer

Balance Transfer17008 views

home loan balance transfer

Home loan balance transfer means transferring your existing home loan. A borrower can opt for a home loan transfer within the same lender from base rate to MCLR or from one bank to another which offers a lower rate. To know more about the details of this product, read this article.

How much Home Loan you had taken
For how many years Home Loan was taken
What is your current rate of Interest
How many months you have paid Home Loan emi
Name of the Bank Home Loan taken
Pre Payment Charges (%)

Where to apply for balance transfer?

You can transfer your existing home loan to another bank without any hassle. All banks and NBFCs provide a home loan balance transfer and top-up facility. Have a look at the top banks where you can apply for balance transfer:

  • SBI
  • Bank of Baroda
  • HDFC
  • Indiabulls
  • Axis Bank
  • ICICI Bank
  • Capital First
  • Kotak Mahindra Bank
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What are the benefits of Balance Transfer?

A home loan balance transfer can prove to be very beneficial for a borrower especially after the demonetization. Since, the home loan rates have gone really down post demonetization, any borrower who had taken a home loan before the rate cut can switch to a new bank now and enjoy paying lower EMIs. However, there are few things that must be kept in mind when it comes to balance transfer. You must check EMI difference and also the actual saving you can do by switching the loan. Let us have an overview of the benefits:

Home Loan Balance Transfer and Top-Up

When it comes to home loan transfer, Top-up is also a common demand among the borrowers. Since the new rates are lower than the existing one, the extra money you can get through Top-Up will not cost you much. You can use this money for any personal or business needs. Having said that, there are many banks and NBFCs that provide balance transfer on home loan along with the top-up facility of up to 100% of the original loan amount at affordable rates.

Home Loan Balance Transfer Calculator

A home loan balance transfer calculator is the tool that can help you make the right decision. This calculator takes into account the existing home loan details like the loan amount, the rate of interest, tenure, the total EMI paid, and the name of the bank from which you have an existing home loan. On the basis of these details, you will get the options available in the market where you can transfer the loan.

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Below is an example showing the savings you can make if you balance transfer your home loan after 2 years.

BankInterest Rate (p.a.)Loan Amount (₹)Tenure (in years)Total Interest Outgo Payment (₹)Total Savings (₹) =
Existing (A)10%30,00,0002069,48,156 (A)8,96,068
New (B)8.75%28,95,5081857,59,522 (B)

What are the documents required for Balance Transfer?

The process of home loan transfer includes research on which lender is going to be best for you and then submitting the required documents as mentioned below:

  • Balance transfer form
  • KYC
  • Last 6 months bank statement
  • Last 2 months salary slip
  • Last 2 years ITR copy
  • Form 16
  • NOC from your builder/society
  • Proof of ownership

Fees and Charges

At the time of transferring the loan, you have to consider the overall cost of your loan. In simple terms, you must check the processing fee, the stamp duty, legal charges, valuation fee, technical charges and other allied charges that your new bank would charge on the transferred loan amount.

Generally, banks charge 0.50% to 1% fee or standard processing fee of ₹5000 on the transfer. The stamp duty would cost around 0.20%-0.50% on the mortgage in selected locations. However, State Bank of India has zero processing fees on balance transfer for loan disbursed till December 31, 2018.

Benefits for Women Borrowers on Home Loan Transfer

There are many benefits for women borrower or co-owner of the property. Let us have a look at the advantages that a woman borrower can get:

  • Lower interest rates
  • Concession on the stamp duty
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Things to Remember

A home loan is a long-term commitment and hence while choosing the lender you have to be very careful about what and how this new bank is beneficial for you. Having said that, there are certain things that you must need to consider. So, have a look at the things that you must remember before finalizing your deal:

  • Compare the deals
  • Calculate the total interest outgo on existing loan as well as on new loan
  • Total cost of the process
  • Charges included in the process
  • Check if the rate offered is fixed or floating
  • How much is the total saving

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Personal Loan Interest Rates July 2020
Fullerton India14.00% - 33.00%
HDFC Bank10.75% - 21.45%
ICICI Bank10.75% - 18.49%
IndusInd Bank11.25%
Kotak Bank10.99% - 20.99%
RBL17.50% - 24.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates July 2020
Axis Bank7.75% - 8.55%
Bank of Baroda6.85% - 7.85%
HDFC6.95% - 8.00%
ICICI Bank7.45% - 8.55%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank7.40% - 9.70%
LIC Housing7.40% - 8.85%
Piramal Capital & Housing Finance9.00% - 9.10%
PNB Housing Finance8.60% - 9.45%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI6.95% - 7.60%
Tata Capital9.20% - 9.35%