When you are considering transferring your current home loan to another bank, it’s only wise to consider the possibilities and benefits beforehand. Lest you may find yourself in a worse position than you are already in. It could be perfectly assessed, if and only if you look at the facts available to you and evaluate what will happen when you make the transfer.
So, before we get into the details of the Home Loan Balance Transfer and its advantages, if there are any, let’s find out exactly what a balance transfer is.
When you balance transfer your loan to a new lender, the bank pays off your previous loan and extends a new loan for the balance amount at a lower rate of interest. You are now entitled to pay new Home Loan EMIs to the new lender. Usually, people Apply for Home Loan Balance Transfer for the advantage of the lower interest rate.
Before opting for the same, it is crucial to evaluate the net benefit carefully. If there is a considerable difference in the interest rate offered, it seems a wise decision to transfer the loan to the second lender. However, you must not forget to consider processing fees for transferring the loan. The loan transfer fee could be anywhere between 0.5% to 2% of the loan amount, and other charges may include lawyer’s fees and mortgage charges. Always make the right comparison, after assessing all charges involved.
Once you have decided to transfer the home loan, you would want to know when you can do it. It will be easier for you to do it when the reset time is nearing, which is at a year's end. Once you approach the end of the year, file for a transfer in your bank. Another thing you can do is to refinance the loan from the same bank at a lower MCLR which would bring down the interest rate a little lower. If that’s the way you want to go, you just have to sign a one-page document and send the same to your bank.
The balance transfer is most suitable for the borrowers who are still in the early stages of their repayment tenure. This way the amount saved would be a lot more than the case when you decide for the same at the later stage.
You can go for Kotak Mahindra Bank HLBT. They offer competitive rates of interest as compared to other banks and would be easy to take a transfer into.
Some benefits of Kotak Mahindra Bank HLBT are:
- Top-up loan availability. The borrowers who are transferring their Home Loan to Kotak Mahindra Bank can top up their loans and take an extra loan amount to fulfill any urgent or important financial matter.
- There EMIs are customized for buyers, which make them a favourite lender among the borrowers. This customization helps in flexibility of repayment of the loan. People tend to worry a lot about the monthly EMI, and their fears aren't baseless. It burns a considerable hole in their pockets.
- You can customize your repayment tenure with Kotak Mahindra Bank. This makes it easier for the borrower to repay the money, without much hassle. The borrower could easily make arrangements and plan his savings accordingly.
- The transfer charges are low at 0.25% to 0.5% of the total loan amount.
Eligibility for Kotak Mahindra Home Loan Balance Transfer is factored on a few prerequisites from the borrower:
- The income of the borrower is one of the important factors. The borrower could ask for a monthly salary or the annual income.
- The source of income is another consideration. Whether you are a salaried employee in a private or government facility or a business owner will also affect the lender's decision to lend you a loan.
- Age is the next factor.
- The lender would also be interested in knowing how many dependants do the borrower has.
- Most lenders want the borrower to have sufficient work experience.
- Lastly, the credit history of the borrower is taken into account besides their credit score.
The documents which would be required of the borrower is his age proof, Identity proof, Address proof, and Income proof. Since these are the basic requirement of verification, it’s always needed in any form of bank transaction.
In conclusion, it is a good idea to transfer your loan to another bank when you have assessed that they provide a lower rate of interest with a low charge of the transfer. You should have a long tenure ahead of you when making such a decision.
Check for other charges you may have to incur for the process and also take into consideration all of them. Moreover, you should know about the policies and eligibility requirements of the lender you are transferring to and find out if you are eligible for their home loan bank transfer.
If there are any questions that you have or may stumble upon some doubts when you are trying to transfer the loan, you can always call the bank or contact a financial services distribution company online. You can avail free loan advice without visiting the bank.