How to Use Home Loan Balance Transfer – Step-by-Step Guide

Home Loan

A home loan balance transfer is a facility provided by financial institutions to transfer an already applied home loan from one lender to another. The main reason for doing this is to save money on the interest. However, before applying here, it is also necessary to analyse the amount a borrower is saving using a home loan balance transfer calculator.

What is the process to apply for a home loan balance transfer?

The process to apply for home loan balance transfer involves the following steps:

Step 1: Start with calculating the savings after transferring the loan using a home loan balance transfer calculator.

Step 2: Inform the current lender about the transfer and select a new lender after thorough research.

Step 3: Collect all the necessary documents, especially the NOC.

Step 4: Now, visit the online portal of the new lending institution to apply for home loan balance transfer.

Step 5: Search and go to the application form.

Step 6: Fill in the required details which include personal, income, and contact information. 

Step 7: Generate OTP via phone number or email.

Step 8: Fill in the details of the previous lending financial institution, and the collateral property location with date.

Step 9: Submit the soft copies of all the required documents respectively.

Step 10: Enter the total loan amount, top-up, tenor and interest rate.

Step 11: Submit the application form.

What are the benefits of using a home loan balance transfer?

The benefits of using a home loan balance transfer are as follows:

  1. Save money on the interest amount. 
  2. Availability of additional tools like the home loan balance transfer calculator, for proper financial planning.
  3. Tax benefits will be applicable even after transferring the home loan. 
  4. Minimal documents are required to apply for the transfer.
  5. Top up loan amount is available with a minimal application value.
  6. The loan repayment tenor is flexible and can be chosen as per requirement.

When is it the right time for home loan balance transfer?

The right time to apply for home loan balance transfer facility is during changes in the money supply of the economy or during changes in the policy of the RBI. During these changes, the home loan rate of interest in the lending financial institutions changes accordingly. Thus, one can avail of great deals and a reduction in the total interest amount. However, for this it is important to observe such changes closely and only go for it if the transfer is beneficial.

What are the steps to apply for a home loan?

The steps to apply for a home loan are as follows:

Step 1: Choose the lending financial institution. 

Step 2: Go to the online portal of the respective financial institution to apply for a home loan.

Step 3: Search for the application form and open it.

Step 4: Enter all the required details like personal, address, contact, etc.

Step 5: Generate OTP via email id or phone number, and enter it in the respective box. 

Step 6: Fill in the income and financial details as mentioned in the form.

Step 7: Enter the soft copy of all the required documents in the prescribed section.

Step 8: Submit the application form. 

What are the interest rates for a home loan? 

The home loan interest rates are as follows:

  • Salaried employees
  • Floating reference rate – 15.15%
  • Fresh home loan rate – 8.6% to 14% 
  • Top up interest rate – 9.55% to 15% 
  • Balance transfer rate – 8.7% to 14%
  • Self-employed individuals
  • Floating reference rate – 15.60%
  • Fresh home loan rate – 9% to 14% 
  • Top up interest rate – 9.75% to 15%
  • Balance transfer rate – 9.25% to 14%

What are the eligibility criteria for a home loan?

The home loan eligibility criteria are as follows:

  1. Nationality – Indian and non-NRI
  2. Age – 23 to 62 years (for salaried individuals) and 25 to 70 years (for self-employed individuals)
  3. CIBIL Score – above 750
  4. Employment – 3 years minimum (for salaried individuals)
  5. Business profile – 5 years minimum (for self-employed individuals)

Hence, using the home loan balance transfer calculator and transferring any existing home loan saves money on interest. If it is not possible at the current stage, individuals should keep observing the changes in the economy and transfer the loan only at the appropriate time.

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