Home loans are often the only way in which people can afford property purchases. These loans help in covering about 80-90% of total property cost, which takes off the financial burden on the homebuyer. Now, there are various loan plans that you can choose from, and lenders keep revising loan terms to entice more customers.
Therefore, if you have already taken out a home loan a few years back and now find a new loan plan with much better benefits, it does not mean you have missed a better deal. There is always an option of a home loan balance transfer where the outstanding loan amount is transferred from the existing lender to the new one for better benefits.
If you are looking to go for a home loan transfer, here is the process of getting it done:
- Submit the home loan transfer application to the current lender
When you decide to go for a home loan balance transfer, the first thing that needs to be done is to send an application to the current lender. This application will be a letter that will state the reason for the transfer, so make sure to fill it up accurately.
- Take the Consent letter or NOC
Once you submit the application letter for a home loan transfer, the lender will then provide a consent letter or a NOC (No Objection Certificate). Do note that it is very important to collect this letter as the new lender is going to require it.
- Provide all the necessary documents
At this stage, you can contact the new lender and hand over all the required documents required for home loan balance transfer. Apart from the usual KYC documents and NOC, the new lender might also require loan balance statements, property papers, interest statements, and a duly filled application form.
- Receive confirmation from the current lender
After completing the documentation formalities with the new lender, they will pay off any outstanding amount with the previous lender. Once this is done, wait for a final confirmation from the current lender about closing of the existing loan account.
- Pay the fees and start paying EMIs with the revised terms
At the final stage, sign a contract with the new lender and clear any fees for the balance transfer. After this is done, you can start paying the EMIs as per the terms of the new lender, such as the revised home loan interest rate.
After reading about the steps, you can go ahead and kick start the process by sending an application for the home loan transfer. Before doing so, it is better to make use of a home loan balance transfer EMI calculator to understand how the new plan will benefit you. Also, make sure to check with the current lender regarding the documents required for home loan balance transfer to avoid any hassles during the process of transferring the loan.