What Is A Home Loan Balance Transfer

A Home Loan can immensely help organise funds while you purchase or construct your house. However, while seeking financial assistance through a Home Loan, sometimes you may find yourself unhappy with the loan terms. Today, several banks offer you flexible tenure to repay Home Loans. However, a Home Loan Balance Transfer with the right bank can help ease the repayment process.
In this article, let us dive further to understand this transfer better.

Home Loan Balance Transfer is also commonly known as Home Refinancing. This service comes in handy to switch your Home Loan balance to another bank that offers you more flexible repayment options than your parent bank. The new bank could offer attractive interest rates, improved tenure, or better repayment facilities. Once you select a new bank to move your Home Loan, the new bank pays your parent bank the outstanding amount.

The following steps will allow you to initiate a Home Loan Transfer to other banks:

• Apply: Before initiating a Home Loan Balance Transfer, you must inform your present lender that you wish to do so. You can do this via a letter listing why you opted for the transfer or an application form, whichever your bank requires.
• No Objection Certificate: The original lender will offer you an NOC or consent letter after applying. This document is essential for applying for a transfer with a new lender. 
• Document Submission: Now that you have the NOC, you can hand the required documents to the new lender. You might have to submit KYC paperwork, property papers, loan balance, and interest statements along with the NOC. Along with this, you need to submit all the mandatory documents as cited by the bank.
• Confirmation from Old Lender: After handing over the documents, wait for confirmation from your old lender that the original loan has been closed. 
• Payment of Fees: Once you receive the confirmation, you can pay the requisite fees to the new lender and begin a new loan contract. 

As per the Reserve Bank of India (RBI) guidelines, the lender cannot levy any foreclosure charges on floating rate loans from where you wish to transfer your Home Loan. However, certain banks can charge a pre-payment penalty fee on fixed-rate loans ranging from 1-3%.

Before deciding to transfer your home loan, evaluating if it's the right move for you is essential. A Home Loan Balance Transfer Calculator can help by comparing the terms of your current loan with those offered by a new lender.

To use the calculator, input the following details:

• Principal Outstanding: The remaining balance on your current loan.
• Loan Tenure: The remaining term of your loan.
• Interest Rate: The current interest rate of your loan.

The calculator will show you the potential savings from transferring your home loan, making it easier to decide if the transfer is beneficial.
HDFC Bank recognises the importance of having a home and offers Home Loans at attractive interest rates with easy repayment methods and flexible tenures. Click here to apply for an HDFC Bank Home Loan!
What is the difference between a base rate and an MCLR rate on Home Loans? Click here to read more!

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Home Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.