Understanding Which Bank is Best for Home Loan Transfer in India 2024

Exploring the ideal bank for home loan transfers in India involves navigating various options. Factors like interest rates, processing fees, and customer service play a crucial role when considering a switch.

This guide aims to simplify the process of understanding which bank is best for home loan transfers. By breaking down key elements, this guide will help you make an informed decision, ensuring a smooth transition to a financial institution that aligns with your needs and goals.

What is a Home Loan Transfer?

Home Loan Transfer, or Home Loan Balance Transfer (HLBT), means a person shifts the remaining amount of their current home loan from one lender to another to benefit from a lower interest rate. This process, also called refinancing, helps borrowers save money on interest payments. It’s like moving your home loan to another bank or financial institution to get a better deal.

How to Choose the Right Bank for Home Loan Transfer in India

To choose the right bank for a home loan transfer in India, you need to consider the following things:

Home Loan Transfer Interest Rates

The primary factor influencing your decision should be the interest rates the prospective banks offer. Lower interest rates can significantly reduce the overall cost of your home loan. Research and compare the interest rates provided by different banks, considering both fixed and floating rate options. Ensure that the new rate is substantially lower than your existing one to make the transfer financially beneficial.

Home Loan Balance Transfer Charges

Before finalising a transfer, carefully examine the balance transfer charges imposed by the new lender. These charges typically include processing fees, administrative costs, and other miscellaneous expenses.

Eligibility Criteria

Each bank may have different eligibility criteria for home loan transfers. Analyse the requirements and ensure that you meet them before initiating the transfer. Factors such as credit score, employment stability, and repayment history may play a crucial role in determining your eligibility.

Lender Credentials

While transferring a home loan to another bank, it’s essential to assess the credentials of the prospective lender. Verify the reputation, reliability, and customer service of the bank. Customer reviews, testimonials, and the bank’s track record in the home loan market can provide valuable insights.

Tenure of the New Home Loan

Consider the tenure or duration of the new home loan before making a decision. A longer tenure may offer lower monthly payments but could result in higher overall interest payments. Conversely, a shorter tenure may lead to higher monthly payments but lower overall interest costs. Choose a tenure that aligns with your financial goals and capacity, keeping in mind the impact on your monthly budget and long-term financial commitments.

Top 10 Best Banks Offering Home Loan Transfer in India

Here is a list of the top 10 banks that offer home loan transfer in India:

SBI

Maximum Tenure	30 years
Loan Amount	Rs. 50,000 – Rs. 10 Crore
Best Rate	9.15% – 9.65%

HDFC Bank

Maximum Tenure	30 years
Loan Amount	Rs. 10 Lakh
Best Rate	8.35% – 9.6%

LIC Housing Finance

Maximum Tenure	30 years
Loan Amount	Rs. 1 Lakh – Rs. 15 Crore
Best Rate	8.50%

Axis Bank

Maximum Tenure	30 years
Loan Amount	Rs. 5 Lakh – Rs. 10 Crore
Best Rate	9%

Bank of Baroda

Maximum Tenure	30 years
Loan Amount	Rs. 20 Crore
Best Rate	8.40% – 10.60%

Canara Bank

Maximum Tenure	30 years
Loan Amount	6*Gross Salary
Best Rate	9.25%

Union Bank of India

Maximum Tenure	30 years
Loan Amount	Rs. 7 Lakh – Rs. 30 Lakh
Best Rate	8.7%-8.95%

Kotak Mahindra Bank

Maximum Tenure	25 years
Loan Amount	Rs. 10 Lakh
Best Rate	8.7% – 8.95%

ICICI Bank

Maximum Tenure	25 years
Loan Amount	Rs. 10 Lakh
Best Rate	9.00% – 10.05%

Punjab National Bank

Maximum Tenure	30 years
Loan Amount	Rs. 30 Lakh
Best Rate	7.70% – 9.70%

Eligibility and Documents Required for a Home Loan Transfer in India

Eligibility

• The applicant should be an Indian citizen to be eligible for a home loan transfer.
• The applicant should be between 18 and 70 years old, ensuring a reasonable age range for loan eligibility.
• Banks typically prefer applicants who opt for an extended loan tenure, giving flexibility in repayment.
• The property for which the home loan is availed must either be ready to be occupied or already occupied by the applicant.
• Before applying for a transfer, the applicant should have paid at least 12 EMIs (Equated Monthly Installments) of the existing home loan.
• The existing home loan should have no outstanding dues, indicating a good repayment track record.

Documents Required

• KYC Documents: ID Proof, Address Proof.
• Loan Application Documents: A completely filled loan application form, three passport-size photographs.
• Identity Proof: Passport, PAN Card, Driving License and Voter ID Card (Any 1).
• Property Documents: NOC (No Objection Certificate) from the builder and Sale Agreement.
• Financial Documents: Applicant’s bank account statement for the last six months, three months salary slips (for salaried applicants) and Income Tax Returns for the previous two years.

Factors to Consider While You Transfer Your Home Loan

When considering a Home Loan Balance Transfer (HLBT), many borrowers focus primarily on the interest rate offered by the new lender. However, several other critical factors should be taken into account to ensure a successful and beneficial transfer.

If a Large Chunk of Loan is Remaining

It is most advantageous when a substantial portion of the loan tenure remains. For instance, transferring a home loan with a 20-year duration is most effective when approximately 10 to 12 years are still pending, ensuring that the cost of transfer is justified by the potential interest savings over the remaining loan period.

In Case of a Lower Rate of Interest

Significant savings can be achieved over the loan period with just a slight reduction in the interest rate. Therefore, it is prudent to consider a HLBT when a lower rate of interest is offered, as this directly contributes to reducing the monthly EMI burden and the overall interest outgo.

Better Loan Terms are Being Offered

Beyond the interest rate, borrowers should assess the overall terms and conditions of the balance transfer offer. Some lenders may provide more favorable repayment terms, flexibility in prepayment options, or additional features that can enhance the borrower’s financial flexibility.

Part-Prepayment is Offered

If the new lender allows borrowers to make part-prepayments without imposing hefty penalties, it can be a compelling reason to consider a home loan transfer. This feature empowers borrowers to proactively manage their outstanding principal and accelerate the loan repayment process.

How to Apply for a Home Loan Transfer in India

To initiate the process of home loan transfer in India, individuals can choose between an online or offline application method, depending on their preferences and convenience.

Online Process

• Visit the Bank’s Official Website: Begin by navigating to the bank’s official website to apply for a home loan balance transfer.
• Fill in Personal and Financial Details: Complete the online application form by providing essential personal, financial, employment, and property details.
• Verify Loan Offer: Verify the loan offer provided by the bank after submitting your application.
• Enter Property Details: Input the details of your property, ensuring accuracy and completeness.
• Pay Fees Online: Make the necessary payments online, including processing fees and any other charges associated with the home loan balance transfer.
• Upload Necessary Documents: Securely scan and upload all required documents through the bank’s online portal.

Offline Process

• Visit the Nearest Bank Branch: Physically visit the nearest branch of the bank where you intend to apply for the home loan balance transfer.
• Submit Loan Application: Submit a comprehensive loan application, providing all the necessary details to the bank’s representative.
• Obtain a No Objection Certificate (NOC): Acquire a No Objection Certificate (NOC) from the existing bank, confirming their approval for the balance transfer.
• Provide Necessary Documents: Furnish all the required documents to the new bank for verification.
• Final Confirmation from Previous Bank: Seek final confirmation from the previous bank regarding the settlement of the outstanding loan amount.
• Pay Required Fees: Complete the payment of all applicable charges to initiate the new loan with favorable terms.

How to Transfer Home Loan from One Bank to Another

The process of transferring a home loan from one bank to another involves several steps. Here’s a detailed breakdown of each step in the home loan transfer process:

Step 1 – Visit the Concerned Bank’s Website

Begin by navigating to the bank’s official website where you wish to transfer your home loan. The website typically provides detailed information about home loan products, terms, and conditions.

Step 2 – Review Terms and Conditions, Interest Rates, and Processing Fee

Thoroughly examine the terms and conditions of the home loan transfer scheme offered by the bank. Pay special attention to the interest rates and processing fees associated with the transfer.

Step 3 – Apply for Balance Transfer

If you are satisfied with the terms, initiate the application process for the balance transfer, by filling out an online application form on the bank’s website.

Step 4 – Complete Application Form

Fill in the required fields of the application form, such as your name, property type, existing loan tenure, and name of the bank currently holding your loan.

Step 5 – View Loan Offer

Upon completing the application, you should be able to view the loan offer generated by the new bank. This offer will outline the terms, interest rates, and any additional conditions associated with the balance transfer.

Step 6 – Pay Fees and Upload Documents

Proceed to pay all the necessary fees related to the balance transfer. Simultaneously, upload the required documents, including KYC documents, property-related documents, and financial statements.

Step 7 – Complete Application and Await Approval

After paying fees and submitting documents, finalize your application. Now, patiently wait for the bank’s approval, which may take some time as the new bank reviews your application and verifies the provided documents.

Conclusion

What is a home loan transfer?

Home Loan Transfer, also known as Home Loan Balance Transfer (HLBT), is a strategic financial move where a borrower shifts the remaining amount of their current home loan from one lender to another.

How does home loan transfer work?

The Home Loan Transfer process begins with the borrower expressing the intent to transfer the balance to the existing lender.

How to choose the right bank for a home loan transfer in India?

Selecting the right bank for a home loan transfer involves considering crucial factors like interest rates, balance transfer charges, eligibility criteria, lender credentials, and the tenure of the new home loan.

Top 10 best banks offering home loan transfer in India

A comprehensive list of the top banks offering home loan transfers in India are SBI, HDFC Bank, LIC Housing Finance, Axis Bank, Bank of Baroda, Canara Bank, Union Bank of India, Kotak Mahindra Bank, ICICI Bank, and Punjab National Bank.

Eligibility and documents required for a home loan transfer in India

To be eligible for a Home Loan Transfer, the applicant must be an Indian citizen, aged between 18 to 70 years, and should have paid at least 12 EMIs of the existing home loan. Necessary documents also need to be submitted.

Factors to consider while you transfer your home loan

• If a Large Chunk of Loan is Remaining
• In Case of a Lower Rate of Interest
• Better Loan Terms are Being Offered
• Part-Prepayment is Offered

How to apply for a home loan transfer in India?

You can apply online and offline for a home loan.

How to transfer a home loan from one bank to another?

• Go to the concerned bank’s website.
• Check all the terms and conditions along with the interest rate and processing fee.
• If you are satisfied with the scheme, apply for balance transfer.
• You will need to fill in the required fields, including your name, property type, tenure of the existing loan, and the bank’s name, among others.
• Upon completion, you will be able to view your loan offer.
• Pay all the necessary fees and upload your documents.
• Complete your application and wait for the approval.