All of us dream of a home sweet home and most of us own it with the help of a home loan. Owning a home is not an easy task and deciding on it and its preparation goes for a long time. When you decide to purchase a home, along with that you will also decide to take a home loan. Taking a home loan is not an easy task. It involves a lot of research from your end and need to find the best lender that would best fit into your requirement.Once you decide on the home loan and make up your mind about the amount that you would be taking a loan, you can use a home loan calculator to find out the EMI that you will end up paying once your take your loan. Using a home loan calculatoris a simple task, you need to enter a few fields and your EMI gets calculated.
Sometimes, you might be in a situation where you might require transferring the outstanding balance on your home loanfor various reasons from the existing lender to a new lender. It is not a tough process, but there are few things that you need to keep in mind before you opt for such transfers.
Taking a home loan from a trusted partner is very important to choose the right property. Few lendersallow you to transfer your existing home loan from any of the other lenders like banks, housing loans, etc. You can also select to transfer your home loan with any other lender to enjoy the benefits of a low EMI or less interest rate. Also, you can select for a balance transfer of your home loan that is against your property.
So, let us discuss the process for ahome loan balance transfer.
The first step in the home loanbalance transfer process is to provide your current lender with a letter that states that you wish to go for a loan transfer. Once your current lender receives your request, they will be providing you with a No Objection Certificate (NOC) or a letter of consent. Your current lender also gives you a statement of the balance amount as part of your home loan.
As a next step, you need to submit all the documents that your current lender gives to the new lender. On seeing the balance amount, the new lender pays the amount to the old lender so that the loan is closed. Once the old lender gets the balance amount, they pass the property-related documents to the new lender. All the post-dated cheques that you had given to the old lender will get cancelled.
Also, when you choose for a home loantransfer you need to remember that the entire process of taking a loan will be revisited. Hence, the new lender would take the legal verification of all the documents related to your property, have a check of your credit rating, and perform other evaluations. The new lender approves your home loan balance transfer request, only when all these checks are suitable. One main reason for opting to go for a loan-transfer is the low interest rate. The new lender provides you with the interest rate that it currently charges to the other borrowers. There are many features of home loan transfer. They are listed below:
- The reduced interest rate on the home loan
- Special interest for women loan buyers
- Additional top-up for the outstanding balance
- Transfer is affordable and does not have any hidden charges
- Customized repayment choice that fits in to your financial situation
- Easy online transactions and access to easily manage your account
- Prepayment option so that it would reduce your total outflow
- Receive at home service for you ease
Before you go in for a transfer of home loan, it is important that you need to check with the prepayment penalty charges of your existing lenders. Some of the lenders would charge about 2% to 5% of the balance amount as the charge for prepayment penalty. If this is the case, then the transfer would not beneficial as the percentage would amount to a large amount.
Conclusion
Going for a home loan transfer is an option that you have for handling your financial stress in case you get a new lender for a much-reduced interest rate. You also need to check if the new lender charge and processing fee of the borrowed amount. So, you need to analyse from various angles and then decide whether you need to go in for a balance transfer.
