A home loan balance transfer is a facility that allows home loan borrowers to transfer their outstanding loan amount from their existing lender to a new one. The balance transfer facility can help reduce the loan interest rate and bring down the total cost of borrowing. However, the loan balance transfer process involves stringent documentation. Hence, it’s advisable to keep all the necessary documents readily available to avoid any inconvenience while transferring your housing loan.
Documents Required for Home Loan Balance Transfer
Below is a list of essential documents required for home loan balance transfer:
- PAN Card
- Identity proof, i.e., 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 statements for self-employed individuals
- All the property related documents
You must opt for a home loan balance transfer early on in the repayment tenure. This is because, while switching your lender, you will be required to pay a balance transfer processing fee and other charges. By paying such charges, you may end up paying more amount than required. Hence, you must calculate your savings with the help of a home loan balance transfer calculator before switching your lender.
Now that you have a fair understanding of the documents required, go through some of the major advantages of a loan balance transfer.
Benefits of Home Loan Balance Transfer
- Reduces the cost of borrowing
You can make use of the home loan balance transfer facility if you find a lender that offers housing loan at a comparatively lower interest rate. This is because, even a slight reduction in the interest rate can help you save a large amount in the long run and reduce the total cost of borrowing. Since home loans are secured loans, a lot of financial institutions offer loans at lower interest rates.
- Home loan balance transfer and top-up
If you require additional funds while servicing a housing loan, you can consider opting for a home loan balance transfer and top-up with a new lender. The new lender is more likely to offer you a competitive interest rate on the top-up loan. The funds availed through a top-up loan can be utilized to meet various personal and business expenses.
- Better customer service
If you are unhappy with the customer service provided by your existing lender, you can refinance your loan to a new lender that offers efficient and reliable customer service.
Now that you are well versed with the various benefits & documents required for home loan balance transfer, ensure to make the most of it by evaluating all the aspects beforehand.