Home Loan Balance Transfer – Make the Most of it..

Home Loans have become very common today. With the opening up of the economy, the banks have the freedom to decide their interest rates. It has brought in a lot of competition with banks reducing their home loan interest rates to extremely low levels. In fact, it went to as low as 7.25%. The interest rate war has brought out a new product in the market, the Home Loan Balance Transfer (HLBT).


Why do you want to do an HLBT?


There are various reasons for doing so. Let us look at some of the factors that make people Apply for Home Loan Balance Transfer.


  1. The lure of the interest rate benefit is the most significant factor influencing an HLBT.
  2. Borrowers can transfer their Home Loans to the bank they feel comfortable with
  3. Sometimes collateral compulsions make people apply for a Home Loan Balance Transfer. It can happen that your existing bank might not accede to your request for an additional loan like an education loan for studies abroad. Under such circumstances, you have to search for another bank. That bank can ask for collateral in the form of property thereby forcing you to opt for an HLBT.


How do you make the most of an HLBT?


You have seen the reasons why people opt for an HLBT. Let us now look at the procedure you need to follow.


1.       Study the market well


You have decided to transfer your Home Loan to another bank. Therefore, the first thing to do is to search for a new lender. It is a tricky issue. You have many banks offering attractive rates for Housing Loans. It can become difficult for you to choose the right bank. It is better to seek the advice of loan service providers like http://www.mymoneymantra.com. They do the hard work for you by comparing the various products of different banks. You get the information you seek on a single screen. It makes your choice easy. You can also check out the incentives available like waiver of processing fees and so on. Banks have the facility to offer top-up loans depending on your eligibility.


2.       Ascertain your eligibility


Usually, the eligibility criteria are the same for all the banks. You need to have an impeccable repayment record, especially on your Home Loans. Banks take a grave view of defaults. In case you have defaulted on your repayments, the chances of rejection of your HLBT are high. Understand the criteria and calculate your Home Loan eligibility before proceeding with the HLBT.


3.       Keep your documents ready


You have finalised your lender and checked your eligibility. The next step is to keep your documents in order. It is a balance transfer for you, but your new lender treats this as a fresh loan. Hence, you need to provide your KYC and income documents along with the copies of the property documents. It will enable the new lender to make a smooth decision.


4.       Contact your existing bank


Apply to your current banker and seek the following documents from them.

  • Home loan foreclosure letter along with the loan statement for the preceding 12 to 18 months.
  • The list of documents they hold as security


5.       Apply for the HLBT


You have all your documents in order. Apply for the HLBT online. The bank will arrange for the collection of the papers from your residence. On perusal of the documents presented before them, the bank takes a view whether to proceed further or not. The bank calls for the credit report from CIBIL or other credit bureaus to check out your credit history. It enables the bank to take a conscious decision. It then proceeds with the legal verification of the property documents and the valuation of the property. In between, they inspect to verify your employment/business history. On approval of the HLBT, the bank presents you with the sanction letter.


6.       Complete the documentation formalities


On receipt of the sanction letter, you have to go through the terms and conditions. Once you accept the same, the bank proceeds with the execution of the documents. They release the loan directly to your existing loan account. You need to be in touch with your current bank and ensure that they close the loan account. You have to follow up with them and procure your title deeds as well. Ensure to cancel the equitable mortgage with the current bank and execute the new mortgage in favour of your new lender.


It completes the HLBT process. You should make the most of it as you know the process now.



To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.


Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.






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