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Home Loan Balance Transfer

home loan balance transfer

Tired of your high interest home loan? A home loan is practically the longest debt a person could ever take. You will be paying your home loan for almost half of your life. This is the reason everyone wants their home loan interest rates to be affordable and as least as possible. If your existing home loan has a higher interest rate as compared to other lenders in the market, you have an option of Home Loan Balance Transfer or HLBT in order to ease your debt  burden.

When a borrower moves the outstanding balance of an existing home loan from one lender to another, in order to take advantage of a reduced interest rate on the current loan, it is known as a Home Loan Balance Transfer or HLBT. The process of home loan balance transfer is also known as refinancing of the home loan.

Nowadays, almost every lender offers a home loan balance transfer or HLBT option for home loans. If you are eligible, you may be able to refinance your existing loan and get a better deal. Despite this, lenders make every effort to retain their existing customers by offering the finest terms and conditions and lowest possible interest rates. Another way to look at it is that if you find a better deal elsewhere, you can request your existing lender to reconsider your home loan interest rate based on your repayment history and CIBIL score. Your present lender might negotiate and adjust the terms with you.

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 (%)

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 AmountTenureTotal Interest Outgo PaymentTotal Savings = (A-B)
Existing10.00%INR 30,00,00020 YearsINR 69,48,156 (A)INR 8,96,068
New8.75%INR 28,95,50818 YearsINR 57,59,522 (B)

Where Can You Apply for a Home Loan Balance Transfer?

If you’re planning to transfer your existing home loan but don’t know where you can do so. Here is a list of the top 5 banks that offer hassle free home loan balance transfer facility.

BanksInterest Rates
State Bank of India (SBI)6.70%-6.90%
HDFC Limited6.70% - 8.00%
Bank of Baroda6.75% - 8.25%
ICICI Bank6.70% - 7.55%
Axis Bank6.75% - 7.20%

SBI Home Loan Transfer

SBI home Loan Balance Transfer is the most trusted option for balance transfer in case of a home loan transfer.

  • Interest rates range from 6.70%-6.90% depending on your CIBIL score.
  • SBI account transfer application is offered without any prepayment penalty.
  • Interest is charged on daily reducing balance.
  • Concession on the interest rates for women applicants.

HDFC Home Loan Transfer

HDFC offers home loan transfer at affordable interest rates and lower repayment terms.

  • Interest charged on HDFC Home Loan Transfer lies between 6.70% - 8.00% depending on the loan amount.
  • Offers Customised repayment options.
  • HDFC has no hidden charges on its loan transfer.
  • Special offers for applicants employed in The Indian Army.

Bank of Baroda Home Loan Transfer

Bank of Baroda is another bank that allows you to transfer your home loan balance at interesting offers to lower your interest rate on your existing home loan. 

  • The interest rate starts from 6.75% - 8.25%.
  • Offers easy top up loans.
  • Low processing fees.
  • You can even opt for an optional life insurance with a home loan.

ICICI Bank Home Loan Transfer

ICICI bank can be a great option if you are willing to transfer your existing home loan to lower your interest rate.

  • The interest rates on ICICI home loan balance transfer can range anywhere between 6.70% - 7.55%.
  • ICICI even offers pre-approved home loan offers if you have a high CIBIL score.
  • You can avail maximum available tenure with lowest EMIs possible.
  • Balance transfer your home loan without changing your EMIs, if you wish to.
  • Minimal documentation to avail this feature.

Axis Bank Home Loan Transfer

Balance transfer your existing home loan with Axis bank to avail lowest possible interest rates and a hassle free process.

  • Interest rate lies between 6.75% - 7.20% on home loan balance transfer.
  • Home loans on amounts as low as INR 3lac.
  • Axis offers balance transfer at zero prepayment charges.
  • Easy application process with doorstep service which makes it even more convenient.

Eligibility and Documents Required for a Balance Transfer

Eligibility

Apart from the home loan eligibility of banks, there are a few more elements that banks consider when they receive your balance transfer application. The general home loan eligibility is as follows:

  • The applicant must be an Indian citizen.
  • Should be between 18 to 70 years of age.
  • Must have an extended loan tenure.
  • The property must be ready to or already occupied by the applicant.
  • Before applying for a transfer at least 12 EMIs of the home loan shall be paid.
  • No outstanding dues on the existing home loan.
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Documents Required

Banks require a certain set of documents to process your loan transfer application. Here is a list of documents that you will need to apply for a home loan balance transfer:

  • KYC documents- ID proof, address proof.
  • Completely filled loan application with 3 passport size photographs.
  • Passport/ PAN card/ Driving license/ Voter ID card. (Any one)
  • Property Documents- NOC from builder
  • Sale agreement
  • Applicant’s bank account statement for the last 6 months.
  • 3 months salary slips in case of salaried applicants.
  • IT Returns for the last 2 years.

How to Apply for a Home Loan Balance Transfer

Now that you know the eligibility and the documents that are required to apply for the balance transfer. Before you apply for a HLBT, it is recommended to check all the terms and conditions related to the loan that you are applying for. Once you are done with your research and have selected a bank, there are 2 ways that you can apply for a home loan balance transfer. You can either apply online by visiting the bank’s official website or you can directly visit the bank.

Online Process

  • Head over to the bank’s official website and then fill in your personal, financial, employment, and your property details.
  • Verify your Loan offer.
  • Enter the details of your property.
  • Pay the fee online.
  • Upload all the necessary documents.

Offline Process

  • Visit your nearest branch of the bank that you want to apply in.
  • Submit the loan application to the lender with all the required details.
  • Take a No Objection Certificate (NOC) from the bank and then provide the bank with all the necessary documents.
  • Final confirmation from the previous bank.
  • Pay the required fees and start with your new loan.

Factors to Consider While You Balance Transfer Your Home Loan

Generally people assume that the best time to transfer your home loan balance is when they receive an offer with a lower rate of interest because the interest rate is not the only factor to consider in case of a HLBT. The other factors are as follows:

If a Large Chunk of Loan is Remaining

If you want to benefit the most by transferring your home loan, transfer it only if you have most of your loan remaining. It would be of lesser use to transfer your home loan if it is near the end already. An ideal time to transfer a home loan of a duration of 20 years would be 10 to 12 years.

In Case of Lower Rate of Interest

Even the slightest difference in the interest rate percentage can cause a huge difference in the total interest amount of your home loan. A lower home loan interest rate would reduce your EMI burden making it a good factor to consider to transfer your home loan balance.

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Better Loan Terms are Being Offered

You can’t transfer your home loan every time you receive an offer of a lower rate of interest. There are additional factors as well that affect the HLBT apart from the interest rate like the cost and terms of the balance transfer.

Part-Prepayment is Offered

If you further want to cut down your EMI, you can do so by paying a portion of your loan principal through part-prepayment. Part-prepayment not only reduces your EMI but also helps you to save on the interest amount. If your existing lender charges a penalty for making a part-prepayment, you might consider a home loan transfer to another bank.

In Case of a Loan Top-Up

There are times when you might need a loan when you already have an existing loan to support other financial goals. A home loan balance transfer might solve your problem if your existing lender does not offer a loan top-up then it is recommended to transfer your balance to another bank who offers a loan top-up.

In case of a HLBT, you should focus on getting the services and privileges that your existing lender is not providing. However, only transfer your loan balance when you are sure about it and always make an informed decision and avoid falling prey to lender’s short-term offers. Generally, for a borrower a home loan is considered as a win-win situation.

Frequently Asked Question

1. Does a HLBT impact my CIBIL score?

No, a home loan balance transfer will not have any impact on your credit score.

2. Who is eligible for a home loan balance transfer?

Anyone who has an existing home loan and has paid at least 12 EMIs of his existing loan is eligible for a HLBT.

3. Can the borrower be eligible for a top-up loan in addition to a home loan balance transfer loan?

Yes, you can avail a top-up loan in addition to a HLBT loan. Enquire with your lender regarding the same and it is not a big deal.

4. Is HLBT a good option to consider?

Due to the very long tenure of a home loan, it is very important for the borrower to be facilitated with least possible interest rates. You cannot exhaust your entire savings and income on a single home loan. If you think that you have a higher outstanding amount left to be paid and your interest rate is higher as compared to the rates in the market, a HLBT is a profitable option for you as you can save a large amount of interest charges.

5. How long does it take to transfer your home loan balance amount from one lender to another?

It usually depends on the lender and their procedures, however, generally it takes around 15 to 20 days for your home loan balance transfer.

6. Is there any limitation on the maximum amount that can be transferred in a HLBT?

No, you can transfer as much amount as you wish in your home loan. Your complete outstanding amount will be transferred to your new lender.

7. Can HLBT help you save money?

Yes, as your new lender will provide you with a lower home loan interest rate rather than your current lender, you will save a lot of money. Also, your monthly EMI will also reduce and your entire repayment cost will decrease.

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Covered For Life
Personal Loan Interest Rates January 2022
Fullerton India14.00% - 24.00%
HDFC Bank10.25% - 17.00%
ICICI Bank10.50% - 17.50%
IndusInd Bank11.00% - 23.00%
Kotak Bank10.75%
RBL17.50% - 26.00%
Standard Chartered Bank11.00% - 12.50%
Tata Capital10.49% - 14.25%
Home Loan Interest Rates January 2022
Axis Bank6.75% - 7.20%
Bank of Baroda6.75% - 8.25%
Citibank6.65% - 7.40%
HDFC6.70% - 8.00%
ICICI Bank6.70% - 7.55%
Indiabulls Housing Finance Limited8.65%
Kotak Bank6.55% - 7.10%
LIC Housing6.66% - 7.90%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance6.99% - 8.90%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI6.70% - 6.90%
Tata Capital6.90% - 8.75%