Numerous financial institutions offer the facility of a home loan balance transfer. It is a process in which a borrower transfers the remaining loan amount from their existing home loan to a new lender providing a reduced interest rate or better service than the current loan provider. However, a borrower must provide a myriad of home loan documents while availing of this facility.
The primary purpose of HLBT (Home Loan Balance Transfer) is to reduce the borrower’s burden and make the loan experience pleasant. Therefore, it is always wiser to understand the process properly and keep the required things ready. Documents are the biggest formalities an applicant must fulfil while transferring their existing loan to a new lender. Read on to find more.
NOC (No Objection Certificate): The new lender would want to see a No Objection Certificate from the applicant’s current lender to ensure that all dues are clear to date and there are no outstanding balances apart from the remaining loan amount. The NOC also works as the current lender’s consent to transfer the loan balance to another lender. Although the existing lenders do their best to retain their customers, if a new lender offers a better loan and the current lender cannot match that, they must provide a NOC to let the borrower switch.
Consent Letter: The borrower must submit a formal application to the current lender, informing them that they are considering transferring their outstanding loan balance to another lender. They will need a consent letter from the lender’s end.
Foreclosure Letter: The foreclosure letter states that the borrower’s home loan is foreclosed on the date mentioned in the document, and no outstanding amounts are pending with the lender. The existing lender will issue this letter once the borrower pays off the principal pending amount.
Loan Agreement: Also called a sanction letter, a loan agreement is a mandatory document one must get during the home loan balance transfer process.
Loan Statement: This document essentially mentions the home loan specifications, the complete repayment history, the outstanding loan amount, and the borrower’s past record with the lender. Using a home EMI calculator is critical, as it helps select a suitable loan term to maintain a consistent repayment history and develop an impressive loan statement.
Property Documents: The new lender will demand every property-related document during the balance transfer process. If the borrower submitted them with the current lender while getting their existing loan, they must get them back from the old lender and hand them over to the new one. These include:
- Set of documents verifying the property purchase
- Property purchase papers
- Documents to prove property ownership
- NOC from the housing society or property developer
- Registration certificate
- Payment receipt
- Stamp duty papers
Post-Dated Cheques: Many lenders ask for a few post-dated cheques while approving home loans. If the borrower provided them to the current lender, don’t forget to collect them back.
Apart from the above, the borrower will need all the listed home loan documents pertaining to their identity or the property. These include the following:
- KYC documents
- Identity proof
- Pan card
- Aadhaar card
- Driving license
- Voter’s ID card
- Employment ID card
- Financial documents
Additionally, the borrower will need a few documents from their employers to let the HLBT process go smoothly. These documents are necessary to verify the borrower’s employment status and monthly income. These include the following:
- Form 16 from the employer
- Latest salary slips
- Last six months’ bank statements consisting the salary entries
- Employment documents, like the appointment letter or employment contract
For self-employed professionals, these are the required documents:
- Banking details and income proof
- Current account statements
- CA attested P&L statements and balance sheet
Additional documents might be necessary, depending on the new lender’s lending policy and documentation requirements. These might include the borrower’s passport size photographs, signature proof, proof of educational qualifications, utility bills, etc. Before transferring the home loan balance to a new lender, check their required home loan documents individually and ensure fulfilling them. Keeping all the required documents in place will make the borrower’s balance transfer process fast and smooth.