How to Transfer Balance Home Loan From Your Current Lender?

A home loan transfer (also known as refinancing or balance transfer) is an option that most individuals opt for to avail the benefit of lower interest rates prevalent in the market.

Besides saving on interest there are a few other reasons as well to switch a home loan: The bank does not agree to change loan terms: You might want to renegotiate certain terms and conditions with your bank. For example, you might wish to extend the tenure of your loan to lower your EMI, and your bank might not be ready for this change. Top-up loan: The property value might have climbed much higher from its original price. On the basis of this you might want a top up loan to meet a fresh requirement or for a home renovation perhaps. If your lender is not open to finance this you might opt for a new lender. Service issues: Sometimes you might just be unhappy with your bank’s service and accessibility.

1. Request your current lender to provide the documents needed for refinancing the loan
2. After the lender provides a consenting letter with outstanding loan amount, these documents will have to be provided to the new lender who wishes to refinance the loan. It is important to note that the bank you are shifting to will offer you a loan, based on the current home loan rates they are offering to their applicants
3. The new lender will transfer the pending amount to the old lender.
4. The old lender will now handover all important documents – property papers & the remaining postdated cheques and ECS will be cancelled; officially completing the refinancing procedures

1. Processing fee: while transferring loans to the new lender, study the processing fees and other charges
2. It is always better to switch the loan early on during the tenure as you would have already paid out a substantial amount of the interest due initially.
3. In the recent past a loan transfer was the most sought after when teaser loan schemes hit the market. However, one should keep in mind that the teaser rate will contractually rise after a stipulated time frame.
4. Get statements from your current lender stating that property documents will be dispatched within a certain time frame to avoid hassles.
5. Remember that a loan switch will not be possible if you have been irregular with your loan repayment with your current lender.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.