Home Loan Balance Transfer

Home Loan Balance Transfer Details

• Home Loan Balance Transfer (HLBT) is refinancing or switching of your existing Home Loan to a new lender.
• Using HLBT, you can transfer your Home Loan balance to another lender to get benefits such as lower interest rates, revised EMIs, or adjusted tenure.
• You may also opt for a top-up loan up to 100% of your current loan.
• Lenders readily approve balance transfers since these are low-risk customers with good repayment history.
• Maximum transfer requests in recent years occurred due to significant corrections in Home Loan interest rates.
• Repo-linked Home Loans are available starting at 7.35% for up to 30 years.
• It is ideal to transfer your Home Loan in the early years when your interest liability is high.

Features of Home Loan Balance Transfer

• The outstanding Home Loan balance from the existing lender is treated as a fresh loan by the new lender.
• The new lender assesses income stability, credit score, and KYC documents like in a new loan process.
• Application for balance transfer must be submitted to the existing lender for approval.
• Property documents are verified by the new lender’s panel advocate and valuer.
• The existing lender issues a No Objection Certificate (NOC) only after a minimum loan tenure is completed.
• New lenders may charge processing fees between 0.5% and 1% of the loan amount.
• After transfer, the borrower starts paying EMIs to the new lender.

Home Loan Balance Transfer Interest Rates of Top Banks – 2025

Home Loan Balance Transfer Eligibility

• Existing Loan: Applicant must already have a Home Loan from an RBI-registered bank or NBFC with a good EMI repayment record.
• Age: 21–60 years for salaried individuals; 65–70 years for self-employed (may vary by lender).
• Occupation: Salaried, self-employed, professionals, and business owners are eligible.
• Co-applicants: Up to 3 co-applicants can be added to the loan application.
• Income: Minimum monthly income of ₹15,000 (varies across lenders).
• Experience: Minimum 2–3 years in job; business vintage of 3 years with at least 2 years of profit history for self-employed.
• Credit Score: Minimum 650 or above; low scores can lead to rejection.
• Debt-to-Income Ratio: Should be between 40%–50%.
• Loan-to-Value (LTV): Up to 90% of the property’s value, depending on the lender’s policy.

Home Loan Balance Transfer Fees & Charges

• A Home Loan Balance Transfer account functions similarly to a regular Home Loan account, and the applicable fees are comparable.
• Banks charge processing and administrative fees, along with applicable penal and prepayment charges.
• Charges vary across lenders depending on their internal policy.

Most Banks & NBFCs follow these standard rates:

• Processing Fee: 0.5% to 2% of the loan amount.
• Penal Charges: Up to 2% of the outstanding per month.
• Foreclosure Charges: Up to 4% of the prepaid loan amount.

Home Loan Balance Transfer Process

• Pre-steps: Research and shortlist a new lender offering better terms. Calculate savings before proceeding.
• Contact Existing Lender: Apply for a balance transfer and share reasons for the switch.
• Obtain NOC: Once your request is approved, get a No Objection Certificate (NOC) or Consent Letter from your existing lender.
• Submit Documents to New Lender: Provide all KYC, property, and loan documents including interest statement and loan balance certificate.
• Takeover: The new lender repays the outstanding amount to the old lender and takes over the property documents.
• Sign Agreement & Pay Fees: After approval, read the sanction letter and sign the agreement after verifying terms, interest, and hidden charges.
• Disbursal is done via cheque, draft, or RTGS to the previous lender’s account.
• Future EMIs will now be payable to the new lender under the revised terms.

Best Home Loan Balance Transfer Offers 2025

Home Loan Balance Transfer Calculator

• Use the Shahcommunication EMI Calculator to compare your current EMI and interest savings after a balance transfer.
• Enter your existing outstanding amount, current interest rate, and the new lender’s rate to view savings instantly.
• The calculator helps you estimate revised EMI, total interest saved, and tenure reduction.
• This tool assists in evaluating whether a balance transfer is financially beneficial.

When is the Right Time to Opt for a Home Loan Balance Transfer?

• Early Stage Transfer: Ideal when a large portion of the loan tenure is remaining, as most interest is paid in early years.
• Rate Drop: If the new lender offers at least 0.50%–1% lower rate, the switch can result in significant savings.
• Improved Credit Score: A higher score post-loan approval can help you qualify for a lower rate now.
• High Existing Interest: If your current rate hasn’t been revised post repo-rate cuts, a transfer can lower EMIs.
• Need Top-Up: Opt when you require additional funds — many lenders offer a top-up along with the transfer.

Key Documents Required for Home Loan Balance Transfer

KYC Documents

• Identity Proof (any one of the following):
  • PAN Card
  • Aadhaar Card
  • Voter ID
  • Passport
  • Driving License
• Address Proof (any one of the following):
  • Registered Rent Agreement
  • Aadhaar Card
  • Driving License
  • Lease Agreement
  • Passport
  • Latest Gas/Electricity Bill

Income Proof and Financial Documents

• For Salaried Employees:
  • Salary slips for the last 6 months
  • Income Tax Returns (ITR) for the previous 2–3 years
  • Form 16
  • Bank statement for the last 6–12 months showing salary credits
• For Self-Employed Professionals:
  • ITR for the last 2–3 years as per lender requirement
  • Profit & Loss Statement
  • Balance Sheet for the last 2 years
  • GST or Sales Tax Registration Certificate
  • Partnership Deed (if applicable)
  • Certificate of Incorporation (for limited companies)

Other Essential Documents

• Filled and signed loan application form
• Recent passport-sized photographs

Property-Related Documents

• All property documents showing ownership chain for ~30 years
• Encumbrance Certificate for the past 30 years
• Receipts of property tax payments