When Should You Transfer Your Home Loan?
Balance transfer makes sense when the interest savings exceed the transfer costs. Consider these factors:
- Rate Difference: At least 0.5% lower rate is needed for meaningful savings
- Remaining Tenure: More remaining years = more savings potential
- Outstanding Amount: Higher loan = higher absolute savings
- Transfer Costs: Processing fees, legal charges, stamp duty
What Are The Charges For Balance Transfer?
- Processing Fee: 0.25% to 0.5% of loan amount (negotiable)
- Legal & Technical: ₹5,000 to ₹15,000 (property verification)
- Stamp Duty: Varies by state (0.1% to 0.5%)
- Foreclosure Charge: NIL for floating rate loans (RBI mandate)
Documents Required for Balance Transfer
- Existing loan account statement
- Property documents (original)
- NOC / Foreclosure letter from current bank
- Income proof (latest 3-6 months salary slips)
- Bank statements (6-12 months)
- KYC documents