Here’s how home loan balance transfer works
Current home loan interest rate and interest rate financing company determine whether the offer will continue with the same loan or a switch.
For low-interest rate and/or other benefits, the best balance for customers can be transferred to another financial institution or bank. The new finance company pays out the best principal on old lender loans.
Refer this guide on: All You Need to Know About Home Loan Balance Transfer with Top Up Benefits 2018
Who is eligible?
The borrower paid at least 12 EMIs and a good credit rating is likely to get balance transfer offers from other housing finance creditors. The loan can also refer to the minimum loan amount eligible for balance transfer.
A new home loan must apply for a new home loan. Some housing finance companies provide online application facilities to complete this process.
Documents needed for home loan balance transfer
Photographs, bank statements, identity and address proof and income documents. In addition, the following documents are required:
Foreclosure of existing debt
Foreclosure formalities need to be maintained for existing debt. A new lending company can make a payment of principal capital to release original documents from a previous lender.
New loan agreement
The new loan agreement between the new housing finance firm and the borrower has been registered.
Points to be noted:
* Consider the costs involved in making a decision to transfer the balance.
* As per the RBI regulations, no foreclosure charges on floating interest rate lending to individuals through an advance housing finance institution cannot be imposed.