With Urban Money's AI-based home loan balance transfer calculator, you may free yourself from exorbitant EMIs that are preventing you from achieving your financial goals. Our high-tech balance transfer calculator will help you to figure out how much you will have to pay monthly. You can also examine multiple scenarios for various down payments, amortisation durations alongside variable and fixed mortgage rates.
With the advancement of technology in the financial sector, you can now take advantage of the benefits offered by balance transfer loans. A home loan balance transfer allows you to refinance an existing loan with a lower interest rate with another lender.
How to Use Loan Balance Transfer Calculator?
Prepare for things like choosing a new lender, balance transfer fees and required paperwork to have a simple home loan balance transfer process. Urban Money makes the procedure easier for you. You only need to enter a few numbers into our calculator to receive the desired results in a matter of seconds.
- Open our Loan Balance Transfer Calculator.
- Choose your bank from the right tabular data to which you want to transfer your loan.
- Click on ‘Apply’.
- In the provided text area, enter information such as the current loan amount, interest rate, loan repayment term and number of EMIS paid.
- When you press ‘Enter’, the balance transfer amount, new monthly EMI and loan term will appear.
Home Loan Transfer Charges
The charges for transferring a loan balance vary depending on the existing loan bank, the new lender, and the state of the balance transfer. Foreclosure charges [payable to the previous bank], processing fees, and deed charges are included in the transfer charges.
- Foreclosure Charges: The borrower has to pay these charges to the existing bank to take over the ongoing home loan. It is applicable only to home loans with fixed interest rates. At the same time, no foreclosure charges are applicable on floating rate home loans.
- Processing fees: These can range from INR 10,000 to 1% of the loan amount. Furthermore, banks usually offer discounted processing fees, and you can look for the best possible home loan balance transfer offers.
- Memorandum of Deposit of Title Deed (MODT): Specific charges of 0.2 to 0.5% is payable on the mortgage and are restricted to specific states such as Maharashtra, Tamil Nadu, Karnataka, and Rajasthan, amidst others. Whereas, you don’t have to pay any stamp duty in Delhi, Haryana, and Uttar Pradesh.
What is the Difference between Home Loan and Home Loan Balance Transfer?
|Home Loan||Balance Transfer Loan|
|When an applicant avails a loan from a bank/ financial institution for purchasing a house, plot, or land, for construction, or for renovation purposes, then it is termed a home loan.||When the borrower decides to transfer an existing loan to another lender, it is termed as a loan balance transfer.|
|The borrower has to submit numerous required home loan documents and has to go through a verification procedure to avail of the home loan.||It involves less documentation as half of the documents are already submitted to the existing bank.|
|Getting approval for a home loan is a considerably harder and more lengthy procedure.||We can say acquiring a balance transfer is quite easier than acquiring home loans.|
|A home loan is availed when you need to buy a new home, plot, or renovate the existing one.||The balance transfer is availed when the current lender charges higher interest rates compared to other lenders.|
How Do I Avail the Best Home Loan Transfer Offer or Deals?
- Check New Lender’s Performance History [Interest Rate]: Begin by looking at the lender's previous interest rate performance. Find out if the advertised interest rate is for a limited time or if they only offer loans at the listed interest rates. Don't get caught up in a marketing ploy.
- Be Assured about the Service Quality of the New Lender: Check to see if the chosen bank's service quality meets your expectations. It's not worth it to get a cheaper interest rate on a balance transfer home loan at the expense of poor service.
- Examine the Benchmark Rate: Refer home loan balance transfer charges RBI guidelines and current Repo Rate as they are more specific for home loans in contrast to PLR and MCLR. Access more transparency and low-interest home loans with schemes related to Repo Rate.
- Variable or Fixed Spread: Floating rate loans have two components to their interest rate. One is the benchmark rate, while the other is the spread above it. The benchmark rate fluctuates over time, but the spread remains constant. Many banks leave both components open-ended, resulting in a rapid spike in interest rates. Thus, avoid banks considering variable spreads.
- Approximate Transaction Cost: Make a rough estimate for the involved costs such as processing fees, documentation charges, and stamp duty charges (if applicable).
- Issue Advance Notice to the Existing Lender: Many banks hold on a prior notice, then only the borrower is permitted for prepayment through loan transfer. Refer to your loan agreement and make sure there is no due notice.
Documents Required for a Home Loan Balance Transfer?
Enlisted are the essential documents for the end-to-end procedure of the home loan balance transfer.
- No Objection Certificate (NOC)
- Consent Letter
- Loan Agreement
- Foreclosure Letter
- Housing Loan Statement
- Property Documents
- Post Dated Cheques
- KYC Documents
- Financial Documents
Benefits of Loan Balance Transfer
Borrowers typically use balance transfer loans to obtain a lower interest rate from another lender. Reduced EMIs are a major advantage of taking out loans with lower interest rates. Let’s have a quick look at certain balance transfer benefits:
Better Negotiation for Loan Refinance
You can negotiate better repayment conditions with the new lender if you're taking out a balance transfer loan. As a result, balance transfers provide borrowers with better negotiation choices in order to obtain more cost savings.
Balance Transfer and Top Up
When you opt for a balance transfer, at the same time you can access a home loan transfer with a top-up that is free from end-use restrictions.
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Frequently Asked Questions (FAQs)
When is a home loan balance transfer a good idea?
Home loan balance transfers are a good idea when other lenders offer low-interest rates compared to the existing lender. Such a transfer results in huge cost benefits, cutting down on the associated interest component.
Is there a limit to the amount I can transfer?
Yes, there is a limit to the total amount that you can transfer. The maximum amount is limited to the home loan’s outstanding amount. You cannot transfer an amount greater than this.
When should I not consider transferring my home loan?
You should not consider a home loan balance transfer during the final years of the loan tenure. Additionally, if the existing bank does have a prepayment penalty, drop the idea.
How much money will I save if I opt for a home loan balance transfer facility?
The amount of money that you save while opting for a home loan balance transfer entirely depends upon certain factors, such as the new bank’s interest rate. Calculate the exact amount with our balance transfer.
Can I transfer my home loan to another bank after availing of PMAY benefits?
Yes, you can transfer a home loan to another bank after availing of PMAY benefits. The borrower is supposed to transfer the outstanding loan amount to the lender with lower interest rates.
Is refinancing a home a good idea?
Yes, it is highly beneficial. Refinancing a home loan helps to access lower interest rates and further adds to the cost benefits by lowering the overall interest amount to be paid.
Does my current credit score affect my chances of successfully completing the transfer?
Yes, your current credit score might affect your chances of successful completion of the transfer. It will happen in rare cases, especially when your credit score has significantly dropped from the time when you borrowed your initial housing loan. The transfer procedure is quite similar to the home loan procedure. Thus, your credit history plays a critical role in determining home loan balance transfer eligibility.
Will my refinance be affected by the prepayment penalty?
Most banks and financial institutions don’t charge a prepayment penalty. If the existing bank does have one, then you can ask the new lender to consider it for the account. This usually varies from one lender to another.
Does refinancing hurt your credit score?
No, refinancing doesn’t affect your credit score. If you miss any EMI after procuring a home loan, it may result in an adversely affected credit score.
How much time will it take to transfer my home loan from another bank?
Transferring a housing loan is similar to procuring a home loan from the beginning. The new lender has to go through the submitted balance transfer home loan documents, perform a verification process, check credit history amongst many other formalities. That is why the home loan balance transfer process takes 15–20 days for final approval and transfer.
Do I require a guarantor for a home loan balance transfer?
No, there is no requirement for a guarantor to move further with a balance transfer procedure.
Can the repayment period be extended at the time of transfer?
Yes, the repayment period can be extended at the time of transfer. Banks usually allow borrowers to extend the loan tenure while transferring the loan account. The possible extended tenure may vary from one finance provider to another. Additionally, it is restricted based upon the occupation and age of the applicant.
Can a home loan be transferred to another person?
Yes, a home loan transfer to another person is applicable only when the borrower sells the mortgaged property to the same person [to whom the loan will be transferred].
What processing fee is charged on home loan transfers?
Banks or financial institutions usually charge 0.5 to 1% of the house loan amount as a processing fee.
Is there any interest savings in EMI by home loan transfer to another bank?
The exact amount of EMI reduction varies from person to person and is determined by:
- The remaining principal amount.
- Existing interest rates
- The interest rate offered by the new bank
- Current monthly installments
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