Home Loan Balance Transfer
is a process of transferring existing home loan into another financial institution. A person makes use of this facility when he gets lower interest rates at different bank. To do is one just needs to fill the Home Loan Balance Transfer application form along with calculating savings on top up and home Loan Balance Transfer. Balance transfer is generally done to lower down the interest rates that will turn your home loan to be much easier to the pocket.

It is not just about saving money, but one can also make use of the same for investing in various other options. There is no doubt that a balance transfer will definitely reduce the EMI payment, one –size will not fit everyone’s needs that finding the best one that suits your requirements is essential.

Before balance transfer, here are few important factors that you should keep in consideration:

Calculate the total outflow
Although the new bank tries to attract you by reducing your monthly EMI and giving you a longer span to repay (increasing your tenure), you should be clear that such facilities increase the total amount you pay to the bank because the interest keeps on adding to the outstanding loan amount. If you are paying higher EMIs with your current bank, compare the total outgo for both banks and then take a decision. If you are not hard-pressed for cash, you should prefer staying with your bank, pay a larger EMI and finish off your loan as soon as possible to save all the money you would overpay, by opting for a longer tenure.

Know the cost of transferring the loan
Most of the financial institutions have a transferring fee. The new bank will consider this as fresh loan application, along with re-doing the whole procedure, it is equally necessary to make the fee payments once again according to the percentage on outstanding loan amount. The fee in itself can vary between 0.5% and 1% on the outstanding loan amount. It is applicable at both the places, at the existing financial institution and the new financial institution where the loan is being transferred. It is advisable to calculate this cost while applying for Home Loan Balance Transfer. Generally, balance transfer is not advisable if your loan tenure is only for a short period.

The list of documents that are required for Home Loan Balance Transfer
It is quiet similar to a new Home Loan application. These are the following documents that you require for Home Loan Balance Transfer:

• Duly filled application form along with the passport size photographs signed across
• Identity proof – Aadhar Card, PAN Card, Voter ID, (any one)
• Residential address proof
• Age Proof (10th or 12th Mark Sheets, PAN Card, Voter ID etc.)
• Official Address (Any one of rent agreement, utility bills, lease etc.) for Self- Employed professionals and Self-Employed Business Men
• Income Proof
  • Salaried Employees: Bank Statement of last 6 months, Salary Slips for last 3 months, Form-16
  • Self-Employed Professionals and Business People: ITR of last 3 years, Bank Statement of last 1 year, Profit & Loss Statement and Balance Sheet audited by Chartered Accountant, Auditing Reports and other financial documents (if applicable)
• Copy of loan statement
• Bank Statement of last 1 year from which the Home Loan EMIs have been deducted
• Complete property documents that are in the possession of the current financial institution
• Bank statements showing EMI deductions of existing home loan
• Form-16 documents for the last three years
• Salary slips of the last six months.

Tedious Process
You need to clear all the pending amount to your existing bank or financial to get your NOC – No Objection Certificate. It is required to transfer your loan to a different bank or financial institution. As balance loan transfer is considered as fresh loan for the new bank, therefore as a borrower you will have to go through the entire loan approval process once again. This includes fees and other charges as well. Once all the due diligence is completed home loan will be transferred.

It is advisable to go for Home Loan Balance Transfer at a younger agar as the younger you are, more benefits can be availed and getting loan will be easier for longer tenure from different banks. Your good track record of existing bank’s EMI payment will help you in Home Loan Balance Transfer in a hassle-free and simple manner. Think through by considering the pros and cons of Home Loan Balance Transfer. Unless this brings long term benefits, don’t opt for Home Loan Balance Transfer.

Must Read : Know the Basic Idea of Loan Against Property (Beginners Guide)