Documents Required for Home Loan Transfer in India

Is the home loan repayment taking a toll on your financial health? Are you looking for ways to lower the home loan interest rate or reduce the EMI amount? If you have answered yes, you have the opportunity to transfer the balance home loan amount to another financial institution. The process and means of transferring your home loan from one lender to another is called home loan balance transfer.

One of the reasons why transferring your home loan from your existing lender to another one is a smart choice is that you can repay the balance amount at a lower interest rate. The lower home loan balance transfer interest rate automatically translates to affordable EMI and significant savings on interest payments.

When you initiate the home loan balance transfer process, you must comply with certain documentation processes. Here is a complete checklist of documents required to complete the balance transfer process:

• Consent letter

Once you have decided to refinance your home loan, the first step is to inform your existing lender formally through a written letter about your intent to transfer the loan. In your letter, you must also request the lender to give you a consent letter.

• NOC (no-objection certificate)

Apart from the letter of consent, you must also get an NOC from your existing lender. It must clearly state that the lender has no issues with transferring your home loan and the outstanding amount to the new lender.

• Loan agreement

You must get the loan agreement copy that you initially signed with the existing lender at the time of loan sanction. Without this letter, the new lender may not accept your home loan refinancing request.

• Foreclosure letter

This is another important document required for home loan balance transfer. This letter is issued by the current lender. It is basically a declaration that your home loan is foreclosed, and there is no outstanding balance.

You must get this letter once the new lender settles the principal outstanding home loan amount with the current lender.

• Home loan statement

A home loan statement is like the passbook of your savings bank account. It records all the transactions, i.e., the EMI payments you have till date, the date on which the payment was made, the total amount repaid till date, the outstanding amount, etc. You must get this document from the current lender to showcase your payments to the new lender.

• Property-related documents

Once you foreclose the home loan with your current lender, make sure to get all the property-related documents you submitted to them initially during the home loan approval process. You would need these documents to submit to the new lender before getting their sanction for the new loan.

• Post-dated cheque

If you submitted any post-dated cheques to the current lender for EMI payments during the time of obtaining the loan, make sure to get all the cheques back. You may need to submit them to the new lender.

• KYC documents

When you start looking for a new lender to transfer your loan, you may compare the home loan balance transfer charges, right? While you do so, make sure to also check the KYC documents required by the new lender and keep them handy to avoid last-minute hassles.

Typically, most lenders require you to submit the following KYC documents:

• Identification proof (Pan card, Aadhaar card, driving license, voter ID card, etc)

• Residence proof (Passport, voter ID card, Aadhar card, utility bills, etc)

• Financial documents

Submitting financial documents are an integral part of the home loan transfer process. The new lender will surely verify your financial credibility and repayment capacity and ask you to submit the following documents:

• Latest salary slips

• Bank account statement of last six months showcasing salary credit

• Employment contract or appointment letter

• Form 16 from your employer

• Property-related documents

The new lender will ask for this set of documents to verify your property purchase. You will need to submit the following proof:

• NOC from the property developer or housing society

• Property registration certificate

• Stamp duty payment receipt

• Property purchase documents to prove your ownership

(you will have all these documents in the set you get from the current lender)

Depending on the requirements of the new lender, you may have to furbish additional documents like passport-sized photographs, etc.

 

To conclude

Home loan balance transfer is a great way to reduce the financial burden of home loan repayment and save a lot of money. But, make sure that you are aware of the documents required and comply with it strictly to avoid last minute hassle and rejection of your home loan balance transfer request.