Important points to consider for a home loan balance transfer
Borrowers can avail of a sizeable top-up loan amount on transferring their existing loan to another financial institution. By opting for a home loan balance transfer, one can reduce their EMI amount, decreasing their financial burden.
However, before opting for such a facility, one must consider certain points like eligibility, necessary documents, fees, and charges.
Eligibility criteria for a balance transfer
Borrowers not satisfied with their current home loan interest rate can shift to another lender offering better deals. However, prior to that, they need to fulfil certain eligibility requirements as follows:
- Properties that are ready to occupy or are already occupied are eligible for this facility.
- Borrowers must have paid more than 12 home loan EMIs without any defaults.
- They should be an Indian citizen.
- Salaried borrowers must be between 23 and 62 years of age, and self-employed ones should be between 25 and 70.
- Self-employed applicants must prove a vintage of at least 5 years in their existing business, and salaried employees should have a minimum working experience of 3 years.
Apart from this, one needs to provide certain documents before opting for a balance transfer on their home loans.
Documents required for a balance transfer
Here is a list of documents one needs to present while transferring their home loan balance:
- KYC documents.
- Latest salary slips or Form 16 for salaried borrowers.
- Bank account statements.
- Business proof documents
Fees and other charges
Some charges that borrowers need to bear while choosing this facility are:
- Processing fees.
- EMI bounce charges, if any.
- Penal interest.
- Secure fee.
In addition, individual and non-individual borrowers may also need to part-prepayment and foreclosure charges, depending on the loan type.
Also, one can use an online home loan balance transfer calculator to compute the top-up loan and new loan amount they are eligible for, along with their probable savings.
