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Home Loan Transfer ProcessBrought to you by LoanEasy
What is Home Loan Transfer ?
Home Loan Applicants can transfer their remaining principal amount to another bank offering lower rate of interest. Your new bank pays off remaining amount to old Bank and applicants pay EMI at new interest rate.
Home Loan Transfer is advisable when the outstanding principal amount and Loan Tenure left are considerable.
Note: If your Home Loan was on Fixed Rate of interest then pre-payment charges will be applied for transfer. There were will be processing fee, legal charges and stamp duty involved.
When and Why to consider Home Loan Transfer ?
Find out your Home loan Rate of interest and keep reading if your ROI is above 10% . Current home loan rates are 9.40-11%
Ask your friends Or do web search of lowest interest rates from multiple banks and compare against your existing Bank’s Interest Rate.
The Need for loan transfer arises with the realization that applicants is paying at more interest rate than currently available in the market. Switching in the early phases of your home loan tenure makes sense.
When NOT To Go For Home Loan transfer
1). Your remaining loan tenure is less than 20% or 4-5 Years.
2). The current rate of interest is close to your interest rate.
3). Processing fee of transfer is high and also for Documentation hassles.
Resetting Your interest Rate
Also consider ‘Resetting interest Rate’ with your current home Loan provider. One can negotiate with current bank & ask them to match the current Home Loan ratess in the market. One needs to write a letter to the bank for resetting the interest rate.
HowTo Go About Loan Transfer ?
1). Written application letter to Bank
Write an application letter on a piece of paper stating loan transfer and reasons for it.
Make sure your personal Banker acknowledges your application of balance transfer and ask for next course of action.
What to mention in the Transfer application letter ?
1). Mention your desire of transferring the remaining principal amount of home loan to another Bank.
2). Also mention, your present rate of interest and market interest rate.
3). Ask them to consider resetting interest rate to lowest possible Or match competitors in the market.
2). Letter Of consent/NOC from Present Bank
Mostly, banks comply to your transfer application, they then have to issue a written letter of consent agreeing to your request. Foreclosure statement, property documents and account statements are also given back to the applicant.
3). Documentation for Loan Transfer
1). Address Proof 2). Income Proof 3). Identify Proof
4). Age Proof 5). Copy of Property title Deal
6). Last 2 years Form – 16 7). 6 month Salary Slip
8). 6 Months Bank Statement
4). Credit Appraisal, Property and Legal Verification
Your new Bank will do the Background check and based on which they will sanction your loan. After all documentation and agreements and the new Bank Pays-off the your old Bank.
You have now rectified the mistake and paying lesser EMI.