A home loan is a great financing option if you are looking forward to buying your own house. While availing a home loan you must make a note of all the important aspects such as the rate of interest, monthly installments, loan tenure, repayment terms, etc. All these factors may differ from one financial institution to another. Therefore, it is always recommended to compare various loan offers by different loan-provider before availing a home loan. This will allow you to avail a loan that best suits your requirements.

However, if you have already availed a home loan, you can opt for a home loan balance transfer to get additional benefits. Home Loan Balance Transfer is the process of transferring existing home loan to other bank or NBFC. You can avail this facility for better services and lower interest rates offered by a different financial institution. 

The process of a home loan balance transfer is stringent and requires heavy documentation. It is recommended that you should be ready with all the required documents before applying for a home loan balance transfer. 

Below is a list of essential documents required for home loan balance transfer.

• PAN Card
• Identity Proof such as Aadhar card or license
• Residence Proof in case of owned residence
• Rent agreement if the person is staying in a rented property
• Latest Cost to company proof
• Salary Slips for last three months
• Bank Statements for last 6 months
• Latest Form 16
• Latest Credit Card Bill or Electricity Bill
• Loan payment track records
• Income Proof
• Business Financial Statements in case if you own a business
• All the property related documents
• Original & photocopied documents to be submitted

If you have already completed a major portion of your loan tenure, opting for a home loan balance transfer would not be a wise decision. This is because while opting for a new lender you will have to pay balance transfer processing fee and other charges. By paying such extra charges you may end up paying even more amount than required. Hence, you must access all the aspects of a home loan balance transfer before going ahead with it.

Some of the major benefits of availing a home loan balance transfer are stated as under:

Lower interest rates:  Most borrowers opt for a home loan balance transfer if they find a lender that provides home loan at a comparatively lower interest rate. This is because even a slight reduction in interest rate can help them save a large amount in the long run. Since home loans are pledged with collaterals, a lot of financial institutions offer loans at lower interest rates.  

Pre-payment facilities: The home loan balance transfer does not block the facility of loan pre-payment. Therefore, the loan can be pre-closed at your discretion.

Top-up value: As a result of the high top-up value, the loan repayment will be faster with fewer amounts towards interest.

Now that you know the benefits of a home loan balance transfer, ensure that you make the most of it by accessing all the aspects related to it.

Catherine Gomez