How to transfer my home loan?

While repaying your home loan, you may come across a better home loan with a lower rate of interest and enhanced services. To switch lenders, a borrower can opt for a home loan balance transfer. Follow this procedure to do so as to avail the best benefits that can be offered to you. 

1. Make an application to your current lender
Inform your lender that you seek a balance transfer via a letter or a form, carefully listing out your reasons.

2. Collect the No Objection Certificate
Your lender will get back to you with an NOC or a consent letter and your new lender will require it when you file your application. 

3. Hand over your documents
Contact your new lender and hand over all your documents. Apart from submitting essential documents like the NOC and KYC documents, you may also have to submit a copy of your property papers, loan balance and interest statements, and a filled application form. 

4. Get confirmation from the old lender
After submitting all your documents to your new lender, await final confirmation from your old lender concerning the closure of your loan account. This certifies that the loan contract has ended, as have the terms governing it. 

5. Pay all the fees involved and start afresh
Sign a contract with your new lender and pay the fees that are due. Once this is complete, you can pay your next month’s EMI to your new lender.

When should you opt for a home loan balance transfer?

It is best to carry out a home loan balance transfer in the early stages of the tenor, when the interest component of each EMI is much higher than the principal component.

During this period, you will benefit the most from a drop in the home loan interest and your interest savings can outweigh any balance transfer costs.

How does home loan balance transfer benefit you?

Home loan balance transfer benefits include all of the following.

  • Lower EMIs
  • Ability to repay faster
  • Minimal to no prepayment and foreclosure charges
  • Better customer service
  • High-value top-up loan
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