The increasing competition in the finance industry bodes well for the customers. Financial institutions are vying to grab new customers by offering better features with their offerings. As Home Loans are amongst the most popular financial products in the present times, lenders are offering interesting add-ons to not only attract first-time borrowers but also to entice existing Home Loan borrowers from other financial institutions.
For instance, SBI Home Loan is available for as low as 7.90% p.a for women borrowers. While Yes Bank Home Loan comes wrapped with an extended repayment tenor of up to 35 years. So whether you are searching for a better interest rate or more flexible terms on your existing Home Loan, here is a step-by-step guide to help you transfer your Home Loan effortlessly.
Before you consider a Home Loan Balance Transfer facility, consider certain pre-requisites:
The new lender should offer you better facilities along with friendlier terms and conditions.
If you already have an active Home Loan account but are not happy with the lender due to any reason, you can Opt for a Home Loan Balance Transfer. Herein, your Home Loan will be transferred to a new lender who will repay the outstanding loan amount to the existing lender. The new lender will open a new Home Loan account with a new repayment schedule, which you must follow.
Here are the steps that you must undertake to ensure that the balance transfer process sails through smoothly:
1. Identify a new lender: First of all, identify a new lender. Various lenders offer HLBT facility, so you should ideally compare different offers to ascertain the best option. For example, if you are considering Yes Bank for its extended repayment tenor of 35 years, it is important to also compare Yes Bank Home Loan Interest Rate with your existing lender.
2. Ascertain the benefits: You must ascertain the benefits that you will accrue from the balance transfer. The benefits to be availed must be greater than the cost of a balance transfer, for this decision to make any sense. There is no point in availing a Home Loan Balance Transfer and, in turn, increasing the cost of the borrowing.
3. Get an in-principal approval from the new lender: Once you have identified a suitable lender, you must get an in-principal approval for your Home Loan Balance Transfer. This will require you to submit your documents and other details with the new lender. After assessing your application against its eligibility criteria, the lender will offer you an in-principal approval subject to fulfilment certain terms and conditions.
4. Place a request with the existing lender: After securing approval from the new lender, you should get in touch with your existing lender and place a request for foreclosure. This can be done through phone banking or branch banking. The existing lender will ask you the reason behind this decision, and you must let them know the reason behind you opting for a foreclosure. Once you have placed a request for foreclosure, the existing lender will start the process accordingly.
5. Collect NOC from the existing lender: Along with the request for foreclosure, you must also place a request for the No Objection Certificate with the existing lender. This NOC is required by the new lender and is an extremely important document. It can take a day or two for the existing lender to provide you with a NOC wherein all essential details pertaining to your Home Loan will be mentioned, including the amount payable.
6. Submit the application and documents: After you have procured the NOC from the existing lender, submit it with the new lender. You also need to provide copies of property documents and other essential documents as required. Once you have submitted the documents, the new lender will verify them. After verification, the lender will transfer money to your existing lender, effectively closing your old home loan account.
7. Get foreclosure letter from an old lender: Thereafter, you must obtain the foreclosure letter from the old lender. This letter specifies that all dues against your Home Loan account have been repaid, and the loan account is now settled. After you have obtained this letter, you need to complete the remaining Home Loan formalities with the new lender.
8. Complete formalities for the new Home Loan: Submit a copy of the foreclosure letter with the new lender along with original property papers and any other documents as required by the lender. You will need to sign a new Home Loan agreement to start a new account effectively. The lender will offer you the new repayment schedule which you must now adhere to.
9. Start your EMI payments: Now that your old Home Loan is closed and a new account has started, you must start paying your EMIs according to the new repayment schedule. Make sure that you maintain sufficient balance in your account at least 3 days before the EMI is due.
Following these steps your journey to transfer your Home Loan balance will be swift and hassle-free.
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