123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

2 Important Things You Need To Know About Home Loan Balance Transfer

By Author: Aishwarya Mahurkar
Total Articles: 291

A home loan balance transfer is usually done to allow the borrower to take advantage of lower interest rates in the market. Many times, borrowers during the tenure of the loan are not able to afford the interest being charged. In such cases one can simply apply for a loan transfer to a financial institution that offers a more affordable interest rate. Not only does this make payment of EMIs on time easy, but also allows one to save up by paying a lower interest rate. One can also use this transfer as an opportunity to renegotiate the terms of the home loan to benefit the borrower. If you are planning on getting a home loan balance transfer, there are two things one needs to be aware of:


The first thing an individual must do is write a letter to the existing lender requesting a home loan transfer. After the financial institution considers your request, they will provide a NOC which is also called a consent letter. This document allows the borrower to get their home loan balance transfer and also states the outstanding amount the borrower is yet to pay. This document will be required by the financial institution where the borrower plans to transfer his loan to. The financial institution will then send all the related property documents to the new lender to finalize the transfer of the home loan balance. The interest rate which the new lender will provide is based on the current interest rate which is charged to all home loan applicants.

Prepayment penalty

One thing that the borrower must check up on is whether or not their financial institution charges a prepayment penalty. This penalty usually requires the borrower to pay 2 to 5 percent of the outstanding loan amount to the old financial institution. However there are a few financial institutions which do not charge this penalty to their borrowers. Before applying for a home loan balance transfer, if it crucial for the borrower to find out whether they will be required to pay a prepayment penalty to their financial institutions. In the case of a home loan which has a floating interest rate, the RBI mandate can help you negotiate with the financial institution to waive the penalty off.

If you are planning on getting a home loan balance transfer, the best time to do so would be early into the tenure of the loan. This will allow you to save up and benefit more from the transfer of the loan. During the transfer, the borrower must ensure that their old financial institution sends all the documentation to the new lender on time. This will help reduce any hassles and ensure that the transfer is successful.

Author Bio :

Aishwarya Mahurkar is an experienced writer concerning the finance industry. Her articles help in informing her readers of the home loan balance transfer & home loan sector.

Total Views: 206Word Count: 485See All articles From Author

Investing / Finance Articles

1. All You Want To Know About An Nro Account
Author: Samantha Kennedy

2. Why You Must Outsource Accounting Services Sans Any Doubt And Fear
Author: Lee Bruce

3. Why Door To Door Loans Had Been So Popular Till Now?
Author: David Brown

4. The Latest Trend In Door To Door Loans.
Author: David Brown

5. The Ultimate Revelation Of Door To Door Loans.
Author: David Brown

6. Growing Your Company With Invoice Factoring Funding
Author: Nova Cash Flow Finance

7. All Eyes On The Following Intraday Cash Strategies
Author: robin scott

8. Choosing Chartered Accountancy Profession With Number Of Possibilities
Author: Austin K Loader

9. Greater Noida Triumphs Over Gurgaon To Invite With The Finest Golfing Luxury Living – The Hemisphere
Author: The Hemisphere

10. Towards Benchmarking- Efforts Made Towards Improving Transport Efficiency
Author: Dylan Munro

11. Tips For Ambitious Property Investors
Author: Charlie

12. Need Of The Hour For Investors - Equity Research Reports
Author: Aastha Kapoor

13. Critical Guidelines For Availing Short Term Loans In United Kingdom
Author: David Brown

14. How Do Banks Benefit From An Asset Reconstruction Company In India?
Author: Nidan Narkhade

15. Long Haul Auto Loan: Understand The Pros And Cons Before Saying Yes
Author: David Brown

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: