Documents Checklist for a Home Loan Balance Transfer
Are you an existing home loan customer and paying a higher home loan interest rate?
If yes, you are not alone! Many home loan customers pay a higher home loan EMI amount owing to higher housing loan interest rates.
But you can use the home loan transfer option to reduce home loan rates and pay lower EMIs.
What is the home loan balance transfer and checklist of documents needed to make the switch?
Let’s know all in this post!
What is the home loan balance transfer?
As the name suggests, a home loan balance transfer option lets you transfer your active home loan to a lender offering a lower rate. In turn, it helps you save on higher interest costs and pay lower EMIs.
Most leading banks and non-banking finance companies (NBFCs) provide home loan balance transfer at attractive rates.
Besides helping you lower down your home loan expenses, you can also enjoy a top up loan. A top up loan is available on home loan takeover. It is an additional amount that your new lenders make available.
You can use the amount for anything as per your needs without restrictions. The interest rate on a top up loan and its tenor is almost the same as an ongoing home loan.
If you want to opt for the home loan balance transfer, you have to ensure to meet the checklist for it.
What is the checklist of documents for a home loan balance transfer?
To undergo the home loan transfer, you need to furnish a few documents. Let’s take a look:
- KYC documents.
- Address proof.
- Financial documents.
- Property related documents.
- Documents related to your active home loan.
What documents do you need to collect from your existing lender?
To undergo a successful home loan balance transfer, you have to collect a few documents from your current lender. Let’s take a look:
- Consent letter
You have to submit an application to your current lender intimating to them about your decision to switch your home loan.
2. No objection certificate
If your current lender has no issues letting you switch the housing loan account, it will issue you a ‘No Objection Certificate’.
3. Foreclosure letter
A letter of foreclosure stating that your housing loan is pre-closed on a date with no outstanding balance is left is issued. This letter is obtained after your new creditor pays your outstanding amount to your existing one.
4. Home loan statements
You also need to collect your home loan statement showcasing your EMI repayment record. Your home loan statement will also have details about your outstanding loan amount.
5. Property documents
The next home loan balance transfer document you need to have is the property document from the current lender.
6. Post-dated cheques
While availing of a home loan, you must have submitted post-dated cheques (PDCs) to your current lender. Since you are now foreclosing the loan with your current lender, it is time to collect those pending cheques.
The checklist of documents for a successful home loan balance transfer is now discussed. This is the standard checklist of documents required to undergo a home loan transfer. It may differ from lenders to lenders.
Hence, the exact checklist of documents for a home loan balance transfer may vary from the points discussed here.
Using the online home loan balance transfer calculator is a great way to estimate everything before going for it.
Read Also: Step by Step Guide for Home Loan Balance Transfer
A home loan balance transfer is a feasible option to reduce the cost of your loan. But you should do that during the initial years of your repayment.
It is because if you do that with only 1–2 years left, the processing charges for it will be more than your savings.