Availing of a home loan facility helps you fulfil the dream of moving into or building your dream nest. A home loan is a secured option and comes with a lower interest rate. But since it also comes with a longer tenor, the home loan interest rates could be higher.
However, negotiating with an existing lender, making prepayments and a higher down payment helps to reduce the loan burden.
But, sometimes, you may see a much lower rate offer from a lender. And you may want to switch your home loan account. It is where the home loan balance transfer comes into the picture.
But doing that comes with charges being levied by both lenders. But using the home loan transfer calculator helps you estimate your savings.
If the savings are higher than your transfer cost, you can go for it. Many of you may not know about the home loan balance transfer process.
Read on and go through the standard home loan balance transfer process in this article!
A quick look at the standard home loan balance transfer process
Let’s quickly take a look at the standard home loan balance transfer process. It may vary from lenders to lenders. Hence, it is good to check your new lender’s exact home loan balance transfer process:
- Submit an application to your existing lender
When you feel it is the right time to go for a home loan balance transfer, you need to take the first step. It can be done via the submission of a formal application. In the loan application, you should enlist reasons for making the switch. If it is an online form, you should fill all mandatory columns.
- Collect the No Objection Certificate/Consent Letter
After you have filled the form or submitted the letter, your lender will connect with you with a No Objection Certificate (NOC). It may also be a consent letter. It is a vital document. It is because your new lender will need this when you apply for it.
- Hand over the documents
After receiving the NOC, you can connect with your new lender and submit all relevant documents. Besides vital documents like KYC and NOC, you will need to submit property papers’ copy and a filled application form. You will also need to submit your loan balance statements and interest statements.
- Receive confirmation from your current home loan lender
Once you have submitted all required documents to your new lender, you should wait for the final confirmation from your existing one. It is related to the closure of your active housing loan account. It is an assurance that the loan contract is no longer active and the terms presiding over it are not valid.
- Pay off all the required charges and start repaying your loan afresh
Now, the only step left is to sign a contract with your new lender and pay off due fees. After this is complete, you can start paying your next month’s home loan EMI to the new lender.
If you are able to follow this step by step guide, you can easily approach a swift and hassle-free home loan balance transfer process.
While making the switch, you should also see if your new lender is offering the top up loan facility. A top up loan is a loan above and over the active housing loan.
This way, you can get a considerable amount to meet diverse financial needs.
The top up loan interest rate is lower or a bit more than the home loan.
But, it is a much more affordable option to use funds minus restrictions than a new personal loan.