Important Factors to Know Before a Home Loan Transfer

Failing to pay your dues on time will result in accumulating debts along with hefty penalties. To deal with such a situation, you can use the balance transfer facility. Balance transfer facility on home loans allows you to carry forward your outstanding due to your existing lender to another lender with a lower interest rate.

You can use a home loan transfer calculator to calculate your EMIs and other additional charges. Before you plan for a balance transfer, consider the below-mentioned essential factors.

1. Compare the Available Lender

Make a thorough comparison between multiple lenders based on the interest rate and additional charges they offer loans at. Also, try to plan for a balance transfer after knowing the MCLR and transfer only when the MCLR is low so that you get a loan at a lower interest rate.

2. Learn About the Charges

Inquire your lender about the interest rate and additional charges such as:

• Processing fee

• Late payment fee

• Home loan transfer charges

• Pre-payment and foreclosure charges

Along with these, there are other charges such as secure fee, EMI bounce charges that may be charged on your amount. Once you know the costs, you can use the housing loan EMI calculator to estimate your EMI.

3. Collect All the Necessary Documents

While you request your lender for a balance transfer, collect all the required documents such as no-objection certificate, letter of consent, foreclosing papers and property documents.

4. Know the Balance Transfer Application Process

Once you have selected your lender, know their balance transfer application process. To apply, fill the application form with your personal, financial and employment details. Submit the form and furnish some required documents such as:

• KYC documents- includes Aadhaar card, PAN, passport, Voter ID, driving license, etc.

• Address proof- such as electricity bill, water bill, gas bill, telephone bill, etc.

• Income proof- bank account statements, profit, and loss statements, salary slip, income tax report, etc.

• Business vintage proof- like partnership deed, SEBI registration certificate, GST registration certificate, etc.

The documents required for a home loan balance transfer will depend on your lender and may vary slightly from the ones mentioned above. In addition, you might have to furnish other papers such as NOC from the builder, sales deed, ownership documents, etc.

5. Know the Eligibility Criteria

The standard eligibility criteria include:

• Age– Your age should be between 23 and 62 years if you are a salaried employee. For a self-employed applicant, your age should be between 25 and 70 years.

• CIBIL Score– You will have to maintain a CIBIL score of 750 and above and should hold a strong credit history.

• Income– You should have a regular source of income.

Besides, you will have to be a resident of India, residing in any of the cities where your lender operates. You can check your eligibility using the eligibility calculator of your lender.

6. Know the Transfer Process

After your application is approved, your new lender will settle the outstanding amount with the old lender to take over the loan. Once the home loan takeover is completed, your old lender will hand over all the required documents, thus foreclosing your old loan.

Your loan tenure may be extended if you make a balance transfer. However, such extensions will depend on your lender and your financial stability. The balance transfer facility eases your repayment and makes your EMIs affordable. You can use a home loan transfer calculator for an estimation of your EMIs and repayment tenure.

The post Important Factors to Know Before a Home Loan Transfer appeared first on 24GreenBuildings.