The demand for home loans by people living in top-tier cities has reached its peak in the past few years. As more people opt for home loans, there is a need to determine which bank offers the best interest rates. Many of these individuals are looking for a home loan transfer for various reasons. When keeping up with a bank’s interest rates becomes tough, people want to relocate their loans to another place. This process can be a tedious task for the uninitiated. As for you, we present a comprehensive guide you need so that you can transfer your home loan to another bank today!
Benefits of transferring your home loan
Let us take a look at a few of the benefits of transferring your home loan to another bank.
- Lower interest rates – This is the biggest reason a person wants to transfer their home loan. The new lender offers a lower rate of interest, which reduces the cost of your EMIs. Eventually, the total cost of the loan gets reduced as well, and this can be a huge help for you.
- Easy approval – Not every financial institution offering lower interest rates will involve a hassle-free process. Some of these banks won’t approve your balance transfer quickly. For this reason, a bank that offers easy approval can be a massive benefit of this process.
- Top-up loan – This is a lesser-known advantage of transferring your home loan. People usually need more money to care for other financial needs such as education, weddings, etc. In such cases, a transfer of your home loan balance can help you land a top-up loan. Like a personal loan, a top-up loan allows you income tax benefits of up to Rs. 30,000.
Everything you need for transferring your home loan
- Loan Agreement – Also known as a sanction letter, a loan agreement is compulsory if you wish to transfer your home loan.
- No Objection Certificate – Commonly known as NOC, your current lender should issue this certificate to you before your balance transfer. This certificate is proof that your present lender does not object to transferring your loan to the new lender.
- Consent Letter – You must submit an application to your current lender, where you notify them about your loan transfer plans. In this letter, you also request your lender for a letter of consent.
- Income and Banking Details – There is a list of items you need to present to validate your income details. These usually include account statements, balance sheets and P&L statements, income tax returns, salary slips, Form 16, etc.
- KYC Documents – Your new lender might ask you for a few documents which validate your identification, residence, signature, etc. These usually include PAN Card, Aadhar Card, Driving Licence, Passport, etc.
Keep in mind that every financial institution has its ways of working. You may be asked to present a few additional documents depending on the new bank or lender. Since you have a list of the indispensable documents required for transferring your home loan, you should begin collecting them now.
How to apply for a home loan transfer?
Once you have the required documents, transferring your home loan is as easy as it gets.
- No matter where you’re applying, the first step will always require you to check your eligibility for the transfer.
- If you’re eligible, you will need to enter your details in the application form. These usually include your personal, employment, financial and property details.
- Once you have provided these details, you will be asked to submit certain documents. These might include identity proof, address proof, age proof, etc.
- After this step, most bank websites would present you with your application page so that you can review it.
- Finally, you must pay the online fees and upload any other documents, if necessary.
More or less, this would be the entire process of transferring your home loan to another financial institution.
People living in a tier 1 city constantly look for ways to attain lower interest rates on their home loans. In this process, they usually want to transfer their home loan to another bank. In this guide, one can see the benefits, required documents, and the process involved in transferring home loan.