In the case of home loans, the amount borrowed is extremely high than other loan types. As the borrowed loan proceeds are high, repayment tenure allowed by lenders is longer than those for other loans. However, the home loan interest rate has witnessed a substantial change over the time period. In case you are an old home loan customer, you may see a difference in rates provided to the recent customers by lenders. Thus, if you think you can avail a better home loan rate with another lender, you can opt for a home loan refinance option.
Home loan refinance, also known as home loan balance transfer, is the procedure to switch your current home loan lender to another lender to avail the benefit of affordable interest rate and home loan top up. The top up loan feature through balance transfer can be used to mitigate your various personal needs like home renovation, medical bill payment etc.
Here’s a stepwise process to transfer your existing home loan to another lender
Step no. 1: Submit the application to your present lender
When you look to avail a home loan balance transfer, the initial thing you must do is provide an application. Here, you must carefully construct the application, point out the reasons to choose home loan balance transfer option. If you are filling up a form, please ensure to check and fill it accurately.
Step no. 2: Take the NOC (no objection certificate) or consent letter
Once you are done with the formality, your existing lender will provide you with the NOC or consent letter. It is an important document for this process. Your new lender will require this document when filing your transfer application.
Step no. 3: Provide the documents required for a home loan balance transfer
When you get the consent letter or NOC, you can approach your new loan lender and hand over all the important documents required. Once you submit the necessary documents, you might also require submitting the copy of your interest statement, loan balance statement, filled up application form, and property papers.
Step no. 4: Receive the confirmation from your previous lender
After you submit all the required documents to the new lender, you must wait for the final confirmation from the previous lender regarding the closure of your previous loan account.
Step no. 5: Start with your EMI repayments with your new lender
After you sign the contract with the new balance transfer lender, you must start with your EMI repayments with the new lender.
To zero on the right balance transfer lender, a home loan balance transfer calculator must be used. With this home loan calculator, you can know your overall savings on interest cost. In case the savings is substantial, opt for the balance transfer option.