Top Banks & HFCs Offering Lowest Home Loan Balance Rates in India
The balance transfer rates offered to existing home loan borrowers depend largely on the lender's evaluation of various aspects of their credit profile, including credit scores, age, repayment capacity, occupation, employer profile, etc. Balance transfer interest rates are similar to regular home loan rates. However, some lenders may offer different rates for home loan balance transfer cases. Below is a table providing an overview of balance transfer rates charged by some of the top banks and Housing Finance Companies (HFCs) in India:
Home Loan Balance Transfer Interest Rates
| Name of Lender | Up to Rs. 30 Lakh | Above Rs. 30 Lakh to Rs. 75 Lakh | Above Rs. 75 Lakh | |
|---|---|---|---|---|
| SBI Bank | 8.40% - 10.15% p.a. | 8.40% - 10.05% p.a. | 8.40% - 10.05% p.a. | Apply Now |
| HDFC Bank Limited | 8.40% p.a. onwards | 8.40% p.a. onwards | 8.40% p.a. onwards | Apply Now |
| Kotak Mahindra Bank | 8.70% p.a. onwards | 8.70% p.a. onwards | 8.70% p.a. onwards | Apply Now |
| ICICI Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards | Apply Now |
| Federal Bank | 8.80% p.a. onwards | 8.80% p.a. onwards | 8.80% p.a. onwards | Apply Now |
| L&T Finance Limited | 8.60% p.a. onwards | 8.60% p.a. onwards | 8.60% p.a. onwards | Apply Now |
| Bajaj Housing Finance | 8.50% p.a. onwards | 8.50% p.a. onwards | 8.50% p.a. onwards | Apply Now |
| LIC Housing Finance | 8.35% - 10.35% p.a. | 8.35% - 10.55% p.a. | 8.35% - 10.75% p.a. | Apply Now |
| PNB Housing Finance | 8.50% - 14.50% p.a. | 8.50% - 14.50% p.a. | 8.50% - 11.45% p.a. | Apply Now |
| Punjab National Bank | 8.45% - 10.25% p.a. | 8.40% - 10.15% p.a. | 8.40% - 10.15% p.a. | Apply Now |
| Bank of Baroda | 8.40% - 10.65% p.a. | 8.40% - 10.65% p.a. | 8.40% - 10.90% p.a. | Apply Now |
| IDFC First Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards | Apply Now |
| Tata Capital Housing Finance | 8.70% p.a. onwards | 8.70% p.a. onwards | 8.70% p.a. onwards | Apply Now |
| Axis Bank | 8.70% - 13.30% p.a | 8.70% - 13.30% p.a | 8.70% - 9.10% p.a. | Apply Now |
| Godrej Housing Finance | 8.55% p.a. onwards | 8.55% p.a. onwards | 8.55% p.a. onwards | Apply Now |
Eligibility Criteria for Home Loan Balance Transfer
To be eligible for a home loan balance transfer, certain conditions apply:
- Your property must be ready for occupation or already occupied.
- You must have completed at least 12 EMIs (Equated Monthly Installments) with your current lender.
- There should be no outstanding dues on your existing loan with the current lender.
Documents Required for Home Loan Balance Transfer
To apply for a home loan balance transfer, you need to gather the following documents:
KYC Documents:
- PAN card
- Aadhaar Card
- Proof of Residence
Proof of Income:
- Salary Slips and Form 16 (for salaried individuals)
- Last 3 years’ Income Tax Returns (ITR) along with financial statements (for salaried individuals, self-employed individuals, and professionals)
- Last 6 months’ bank statements
Additional Documents:
- Latest principal outstanding letter from your current lender
- List of documents from your existing financier
- Repayment track record from your current lender
Once you have all these documents ready, you can proceed with the home loan balance transfer process by contacting the lender you wish to transfer your loan to. They will guide you through the application process and provide further instructions on documentation and formalities.
How to Calculate EMI on Home Loan Balance Transfer?
Individuals can calculate the Equated Monthly Installment (EMI) of their home loan balance transfer amount manually using the home loan EMI calculation formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1]. However, manual calculations can be time-consuming and prone to errors. To save time and effort, individuals can use MybankingTips Home Loan EMI Calculator. This calculator is quick, accurate, and convenient to use. It requires just a few loan details, such as the loan amount, interest rate, and tenure, to calculate the EMI along with the total interest cost and total amount payable.
How to Apply for Home Loan Balance Transfer?
To apply for a home loan balance transfer, follow these steps:
- Approach banks/Housing Finance Companies (HFCs) where you have an existing banking relationship. Many lenders offer lower interest rates on home loans to their existing customers with good credit profiles.
- Check if you have a pre-approved offer for a home loan balance transfer. Pre-approved offers have lower processing times as applicants already meet most eligibility criteria.
- Explore and compare home loan balance transfer rates offered by different banks and HFCs on online financial marketplaces.
- Contact your current lender to negotiate the best home loan balance transfer rates. If your current lender is unwilling to match the rates offered by other lenders, consider transferring your home loan to the lender offering the lowest interest rates.
Home Loan Balance Transfer Process
The home loan balance transfer process typically involves the following steps:
Step 1: Shop around for balance transfer offers from other lenders. Compare their interest rates, features, benefits, processing fees, and other charges.
Step 2: Evaluate the cost-to-benefit of the balance transfer, considering all associated costs. Ensure that the benefits outweigh the costs before proceeding.
Step 3: Negotiate the terms with your current lender to see if they can match or offer better loan terms.
Step 4: Once you decide to proceed with the transfer, obtain necessary documents from your existing lender, including a No Objection Certificate (NOC), foreclosure letter, loan repayment record, and property documents.
Step 5: Initiate the home loan application process with the new lender. Submit the application form and all required documents.
Step 6: Receive a sanction letter and sign the loan agreement with the new lender.
Step 7: The new lender will pay off your outstanding home loan amount to the previous lender through a cheque or demand draft.
Step 8: Once the previous lender receives the outstanding amount, they will cancel all cheques and ECS and close your home loan account.
Why Should You Apply for Home Loan Balance Transfer?
Home loan borrowers may consider refinancing their home loans for the following reasons:
- Lower Interest Rate: If existing borrowers initially secured their home loans at higher interest rates due to lower eligibility or poorer credit profiles, refinancing can offer the opportunity to avail of lower interest rates. As their credit profiles improve, they become eligible for loans at lower rates.
- Maximum Tenure: Some lenders allow balance transfer customers to extend their loan tenures beyond the residual tenure of their original home loan. Opting for a longer tenure reduces monthly EMIs, easing the EMI burden. However, it may result in higher overall interest costs.
- Top-up Loan: Refinancing often comes with the provision of a top-up loan, allowing borrowers to access additional funds for various purposes without restrictions. This can be beneficial for those unable to obtain top-up loans from their existing lenders or facing higher interest rates for it.
- Additional Benefits: Refinancing with a new lender may offer additional perks such as EMI waivers or zero processing fees, depending on the lender's policies.
Charges Associated with Home Balance Transfer
Apart from the interest rate, home loan borrowers should consider two important charges before opting for a home loan balance transfer:
- Foreclosure Charges: These charges are paid to the existing lender for closing the loan before the completion of the loan tenure. For floating rate home loans, these charges are typically nil. However, for fixed-rate home loans, foreclosure charges may be as high as 4% of the principal outstanding.
- Processing Fees: These charges are paid to the new lender for processing the new home loan application (on transfer) and may range up to 6% of the loan amount.
Home Loan Balance Transfer FAQs
1. Is there a limit to the amount I can transfer?
Yes, the maximum balance transfer amount is the same as the outstanding amount of the home loan.
2. How many times can I transfer my home loan?
You can transfer your home loan as many times as you like. However, transferring your home loan multiple times can become a hassle because the process for a home loan balance transfer is almost the same as applying for a new home loan.
3. What processing fee is charged on home loan transfer?
Processing fees for transferring home loans typically range from 0.5% to 1% of the loan amount.
4. Can I get a top up on my loan along with the transfer?
Yes, depending on your eligibility, the loan issuer can offer you the option to top up on the home loan being transferred to the new bank. However, there may be processing and legal charges applicable for this service.
5. What is the HDFC home loan balance transfer interest rate?
The HDFC home loan balance transfer interest rate starts from 8.35% per annum. However, the final interest rate is determined based on various factors such as the borrower’s repayment capacity, loan amount, credit score, market value of the property, and other relevant factors.
6. How much time will it take to transfer my home loan from another bank?
Transferring a home loan is similar to applying for a new home loan with the bank the loan is being transferred to. As a result, the process may take approximately 15-20 days for the home loan to be successfully transferred to the new bank.
7. What is a top up loan?
For example, if the value of your property significantly increases from its original price when you took out the home loan, and you need additional funds for home renovations, you can increase your loan amount. This is referred to as a loan top-up.
8. How can I find out the total interest cost payable on your home loan amount?
You can calculate your total home loan interest cost using a home loan EMI calculator. Simply enter the loan amount, loan tenure, and interest rate into the calculator. It will then provide you with your Equated Monthly Installment (EMI) and the total interest cost over the loan tenure.
9. Will my refinance be affected by the prepayment penalty?
Today, most banks and Housing Finance Companies (HFCs) typically do not impose prepayment penalties. However, if your current bank has such a penalty, you can discuss it with your new lender. The approach to handling prepayment penalties may vary between lenders.
10. When is a home loan balance transfer a good idea?
The main reason for transferring a home loan from one lender to another is to take advantage of a lower interest rate offered by the new lender.
11. What is the maximum home loan amount that can be refinanced?
The outstanding amount on your home loan is the maximum amount you can refinance. However, if you need a higher loan amount than your outstanding home loan, you can opt for a top-up home loan when applying for a balance transfer. The maximum amount available through a top-up loan depends on your repayment capacity and the market value of your property.
12. What is the lock-in period for home loan balance transfer?
For floating rate home loans, banks and Housing Finance Companies (HFCs) typically do not impose a lock-in period for home loan balance transfers. However, it is advisable for home loan borrowers to contact their lenders or review their loan agreements for any clauses related to lock-in periods.