About Loan Balance Transfer

It is an act of lending money, residential or commercial properties and other valuable materials from one party to another party with condition of repayment in future with some interest added to the principle amount along with some financial charges as well. The term and condition of the loan should be agreed upon by both the parties before the disbursement of the loan or it can also be defines as It is a financial term in which a financial institution or a Bank lend their money to an individual on his/her application with applied preconditions which latter the borrower has to pay back to the lender, in this case it will be a financial institutions or bank with certain percentage of interest added on the principle amount within a given period of time in a financial year.

Balance transfer of a loan

Balance transfer of loan is generally done in case of a home loan as in a home loan there is a huge amount of money can be involved which is to be paid back to the lender with added interest amount. The rate of interest in home is a bit high as compared to others loan, the higher rate of interest is a matter of concern to many people who takes the home loan and for those also who a planning to take home loan in near future, who does not want to reduce the rate of interest for doing one needs to talk to the bank to reduce the rate of interest which has provided the loan or transfer the loan amount to the bank which has cheaper home loan interest rates. The loan transfer process is also known as refinancing it helps the customer to save a lots of money by transferring their existing home loan amount to other bank which is providing low rate of interest.

Home loan transfer and its key features

It allows the borrower to transfer the balance amount which is outstanding from existing bank to other bank which is providing cheaper home loan

Normally one percent is the charge of loan transfer from one bank to other bank which is paid by the borrower to the new lending bank

Mostly the procedure of application of balance transfer is same as a new application

There is a predetermined time period with which the borrower need to be with the exiting lender which is mention in the original document before which the balance transfer cannot be possible.

After the loan transfer is completed the borrower has to pay the principal transferred loan amount with added interest rates.

Purpose of Home Loan Balance Transfer

Saving money is the most important purpose of balance transfer of a home loan, some of the other purposes for home loan balance transfer is mentioned below

The difference in the rates of interest between the two lenders

It will reduce the EMI

Loan tenure can be changed

It will reduce the money amount paid to the bank as an interest

Attractive deals offered by the new lender will everyone should consider and avail the benefits

Eligibility Criteria of Balance Transfer

The borrower can be a salaried person or he can be a professional self-employee or any businessman with reaming home loan amount which has paid their EMI on regular basis can apply for balance transfer of home loan, however it can vary as different lenders have difference criteria. Some of the most common balance transfer loan criteria are as follows

The borrower should be of an Indian Nationality

The should be in between 21 years to 60 years however in case of individual self-employee in can be up to 65 years.

CIBIL Score: - In India CIBIL score is also called as credit score, Credit bureaus generate the credit score which represents the creditworthiness of an individual. If a person has ever default any loan or credit card payment earlier the CIBIL score will be low and the high CIBIL score of an individual signifies that he has repaid his loan well in time. CIBIL score plays an important role in the approval of loan it is believed to be higher the CIBIL score more is the chance of approval of the loan.

Minimum require salary is required as to check the repaying capacity

Minimum gross salary of a family is required by some banks

Documents required for the Balance Transfer

Complete Loan Application Form

One Photograph of each applicant duly pasted and signed across on application form

Photo Identity Proof (Any One) :-

Residence Address Proof (Any One) :-

For Salaried Individuals :-

Form 16 for Last 3 years / Annual Salary Certificate and Income Tax Return Ack.
Latest 6 months Salary slip
Bank statement/passbook copy with cover page for last 6 months
Employer’s ID Card copy
Appointment Letter / Increment Letter from the employer and also copy of previous employment letters if current employment is less than 2 years

For Self Employed Business and Professionals :-

Last 3 years Income Tax Return Ack and complete set of financials, Audit Report, Tax payment challahs / TDS certificates
Last 12 months bank statements / Passbook copy with cover page of all bank a/c’s
In case of Company, Memorandum & Articles of Association, List of Directors and Shareholding Pattern on Company Letterhead, Latest Annual Return filed with ROC
In case of Partnership Firm, copy of partnership Deed
Company Business Profile
Office Address Proof (Any One) - Any utility bill (electricity/telephone), Shop & Establishment License, Leave & License Agreement, VAT / Service Tax Registration certificate

Details of Existing Loans and Sanction Letters & Repayment statement of these Loans

Credit Card details & latest credit card statement

If Rental income is to be considered, copy of Rent Agreements

Processing Fees chq

Property Papers :-

Latest Agreement for Sale along with the previous chain / link agreements starting from 1st purchaser from builder to till date
Society Share Certificate (front & back side)
Latest Society Maintenance bill
Building sanction plan (Approved Plans) or Occupation Certificate

Additional documents required in case of Balance Transfer (BT) or Seller BT case:-

Foreclosure quotation / letter from the bank
Letter from the bank / financial institute stating list of documents held by them

NOTE : All documents need to be self attested by the respective applicants. For self employed, all income documents need to be certified by CA.

Tax Benefits: There are several tax benefits enjoyed by the business owner when they opt for a business loan. The loan amount can be used for different purposes like working capital or for buying equipment and inventories. As in business loan the borrower enjoys the flexibility in loan repayment

Extra Charges: - Most of the Extra charges can be waived off or there is a possibility of negotiation. There are different extra charges for loan requirements so do ask your lender before making any agreement, some of the charges are

Processing fee

Loan Origination fee

Administrative charges

Late payment charges

Banks Providing Balance Transfer

Top Banks dealing in it:- In India Almost all the major banks dealing in business loans, some of the major bank who are dealing with it are (partially) listed below

HDFC LTD

HDFC BANK LTD

AXIS BANK LTD

ICICI BANK LTD

YES Bank

State Bank of India

Bank of Baroda

Standard Chartered Bank

India Bulls Finance

Aditya Birla

Kotak Bank

Edelwise

DHFL

PNB Hosing Finance

Tata Housing