A home loan balance transfer or home loan refinance can be a good option to reduce your debt burden. If another bank offers a lower interest rate or better terms, it makes sense to transfer your home loan from your existing bank to the new bank. Here, the new bank will repay your home loan to your old bank and then your loan obligation will now be towards the new bank.

Home loan balance transfer eligibility

While the exact home loan balance transfer eligibility criteria may differ from lender to lender, here are some basic things to know:

  • There should be no outstanding dues on your current home loan. All your Equated Monthly Installments (EMIs) up until now should be paid. This is essential to be eligible and to get a good home loan balance transfer interest rate.
  • To be eligible for home loan refinance, you need to have paid a minimum amount of EMIs already. This number will differ from lender to lender but tends to be 12 EMIs. This is because home loans come with a lock-in period that usually ranges from 6 months to 1 year.
  • Another important home loan balance transfer eligibility criteria is that your home should either be occupied or ready to be occupied.
  • You also need to speak with your current bank and get a No Objection Certificate (NOC) along with details of your home loan such as the outstanding loan amount. This needs to be submitted to the new bank or lender along with other documents.

Documents required for a home loan balance transfer

It’s essential to get all the documents required for a home loan balance transfer in place for a smooth process. These include:

  • KYC documents: For identity proof, you can submit Aadhaar, PAN, voter’s ID, or driver’s license while for address proof you can submit Aadhaar, passport, driver’s license, or voter’s ID.
  • Income proof: For salaried individuals, this includes salary slips for the last 3 to 6 months and form 16 or IT returns for the last two years. For self-employed individuals the registration of business certificate, IT returns for the last 2-3 years, balance sheet and profit and loss account of 1-2 years, etc., are required.
  • Property papers: These include NOC from the builder or society, registered agreement for sale, occupancy certificate, maintenance bill, etc.
  • Documents from the current bank: You will need to collect certain documents from your current bank and submit them to the new bank. These include the loan account statement for the past one year, sanction letter, list of original documents held, and any other specific documents required.

The bottom line

The home loan balance transfer eligibility criteria is basic and should not be a problem if you have everything in place with your previous bank and all your EMI dues have been paid. You can always speak with the new bank to get more clarity on what you should prepare or keep in mind for a smooth transition.