Yes, transferring a home loan to a new bank or housing finance company (HFC) can be a good option if the new lender is offering a lower interest rate or additional top-up loan. This process is also known as balance transfer. By transferring the loan to a new lender, you can potentially lower your monthly payments and save money on interest over the life of the loan.
The process of transferring a home loan to a new lender typically involves the following steps:
Research different lenders and compare interest rates, fees, and other terms to find the best deal.
Apply for the loan with the new lender and provide them with all the necessary documentation, such as your income statement and credit report.
Once the new lender approves the loan, they will contact your current lender to start the process of transferring the loan.
Your current lender will then provide a “no-objection certificate” (NOC) to the new lender, which confirms that the loan is clear of any dues and can be transferred.
Once the NOC is received, the new lender will disburse the loan amount to your current lender, who will then clear all your outstanding dues.
After the loan transfer is complete, you will start making payments to the new lender as per the new terms and conditions.
It’s important to note that some lenders may charge a fee for transferring a home loan and it may take several weeks for the process to be completed. But overall balance transfer can be a great option to lower the burden of home loan and save money on interest.