Reasons to Consider a Home Loan Balance Transfer
10 Feb 2021
Reasons to Consider a Home Loan Balance Transfer
Home Loans make it possible for you to invest in a property of your choice. The property could be a ready-to-move-in home or an under-construction property, or a plot of land on which construction will be carried later on. You may also avail loan from any bank/NBFC. Even though you may have started repaying the loan availed from other bank/NBFC, there could be times when you may not want to continue with that lender. Fortunately, you can change your lender and move to another, offering a better deal, by opting for a Home Loan Balance transfer. Let's know more about it in this article.
What Is a Home Loan Balance Transfer And How To Transfer My Home Loan?
A Home Loan balance transfer is a unique facility that enables you to transfer your existing Home Loan to another lender. If you are unhappy with your current Home Loan provider or paying a higher interest rate, you can opt for a Balance Transfer. You can now complete the Home Loan balance transfer process online through the Bank of Baroda website. The entire process is streamlined for your convenience. You need to provide us with the details of your existing Home Loan, lender's name, and the loan amount you intend to transfer. Yes, a Home Loan balance transfer can prove incredibly beneficial. Let's understand when you should opt for it and the benefits of transferring the loan.
When to Opt for Home Loan Balance Transfer Process?
Having explained what is balance transfer loan, let's understand when you should opt for it.
When there's a chance to reduce the overall cost of your Home Loan
The most obvious reason to consider a Home Loan balance transfer is to reduce your Home Loan's overall cost. A Home Loan can work out to be quite expensive in the long run as it involves interest in each installment. So, if there is a chance to save money by transferring the loan to a new lender, you should consider it. However, it would help if you remembered calculating the cost of transferring the loan, the processing fees, etc., and then deciding to move the loan.
When there's a chance of getting a reduced interest rate on your Home Loan
You can consider opting for a Home Loan balance transfer if you come across a lender offering an interest rate lower than that provided by your original lender. When it comes to Home Loans, a lower interest rate can result in significant savings in the long run even by a few decimals. If your calculations show that a reduced interest rate can result in savings, you can opt for the balance transfer loan.
When there's a chance of changing your EMI amount or loan tenure
If you are struggling to pay your loan EMIs, and want to reduce the EMI amount, you can check for a lender who can offer a chance to modify the EMI amount. A lower EMI can make the loan more affordable but may increase the loan tenure. Alternatively, you can increase your EMI amount and reduce the loan tenure as well.
When you need additional loan amount for extension/repair/renovation
Benefits of Home Loan Balance Transfer
Now that we know what is balance transfer loan, let's look at its many benefits:
- As mentioned above, opting for a Home Loan balance transfer from one lender to another can reduce your EMI amount to quite an extent.
- A balance transfer loan can also result in a reduced interest rate on your Home Loan, which, in turn, promotes higher savings.
- Opting for the Home Loan balance transfer process can also help enhance your CIBIL scores, proving beneficial when you need other loans in the future.
- When you've paid all EMIs on time, opting for a balance transfer gives you the upper hand in negotiating the loan's interest rate and terms with the new lender.
- Opting for a balance transfer is especially beneficial if you are not satisfied with your original lender's facilities and services.
To be eligible for a Home Loan balance transfer, you should ensure that you've paid all EMIs on time, without defaulting. The bank considers your credit repayment behaviour and your current credit score before approving your request. Indeed, a Home Loan balance transfer can result in significant savings. So, get the best Home Loan services with Bank of Baroda. Click here to transfer your existing loan from another lender to ours!
List of Documents Required for Home Loan
List of Documents Required for Home Loan
When you apply for a Home Loan, a bank needs proof to verify your identity and assess your creditworthiness, before sanctioning. It does that by requesting you to provide several documents. As such, you should ensure you provide all the documents required for Housing Loan as mentioned on the loan application form.
Here is a list of the primary Home Loan documents you need while applying for a home loan, along with specific documents required from salaried and self-employed Applicants.
Necessary Documents Required for Housing Loan
There are five types of primary Housing Loan documents you need to provide. These include
The duly-filled and signed Home Loan application form available at your nearest Bank of Baroda branch or the bank’s website.
2 Passport size photographs; one of which should be attested on the application form.
A copy of your identity proof document could be your PAN or Aadhaar Cards, passport, driver’s license, or voter ID card. Essentially, it should be any government-approved document with your photograph on it.
A copy of your age proof eligible for the loan could be your PAN or Aadhaar Card, passport, driver’s license, birth certificate, etc.
A copy of your address proof document could be your, Aadhaar Card, passport, driver’s license, bank passbook, utility bills etc. The document should have your permanent address mentioned on it.
List of Documents Required from Salaried Applicants
As a salaried individual, you need to provide all of the Housing Loan documents mentioned above. You also have to give a few additional, income-specific documents, enabling the bank to assess your eligibility. They are as under:
A duly filled Form 16
A letter from your employer certifying your employment status and the duration of your employment
Your salary slips of the last 3-6 months
Your filed IT Returns of the last three years
Investment proofs (shares, fixed deposits), if any.
Account statement showing credit of salary.
List of Documents Required from Self-employed Applicants
Self-employed applicants also need to provide a few additional documents certifying their source of income. These include
Business address proof
Their duly filed tax returns of the past three years
Company Balance Sheet, Profit and Loss Statements, duly audited/attested by a Chartered Accountant
Their business license/professional practice (for doctors, lawyers, etc.) documents
Copies of registration certification for establishments like shops, factories, clinics, offices, etc.
Account statement of business.
Property documents Required for Home Loan
Apart from your basic and income-specific documents required for Home Loan, you also have to provide the documents of the property you intend to buy through the loan. These include:
A No Objection Certificate (NOC) provided by the society or the builder
The original, registered sale deed, letter of allotment or stamped agreement of sale, provided by the builder
Occupancy Certificate for ready-to-move-in properties
Maintenance and electricity bills, along with property tax receipts
Original receipts showcasing any advance payments made to purchase the property
A copy of the building plan for purchasing flats, villas, bungalows, etc.
Original receipt showcasing the land tax paid, along with possession certificate issued by the relevant authorities.
Bank account statements showing any payments made to the seller or builder.
A detailed estimate of construction costs (in the case of construction loans).
To ensure your loan is approved without any hurdles, you must provide all the Home Loan documents mentioned in the loan application form. You may also be required to provide few other documents based on your employment, property type etc. So do you have your documents ready? Go ahead; apply for a Home Loan from Bank of Baroda today!
The 3 Easy Steps to Calculate EMI on Personal Loan?
A personal loan does not require the borrower to provide collateral and so it is an unsecured loan. Since these are unsecured loans, the rate of interest on these loans are believed to be quite higher than all other types of loans. The purpose or intention of a personal loan is to fund immediate financial contingencies. It could either be for business capital, marriage, education or even foreign trips, though the end use of the loan really depends on the borrower, as long as it is for a legitimate financial need.
Before you apply for a Personal Loan, you may want to get down to the basics, to shop for the best offers on personal loans in the market. Among the most popular ones is the Bank of Baroda’s Personal loan product which apart from having the pedigree of belonging to one of the oldest and largest Indian banks, comes replete with some amazing features like flexible repayment options, affordable EMIs (Equated Monthly Instalments) that sit easy on your pocket and sizable loan amount among others in the category of personal loans.
Calculating the EMI on personal loans
The EMI calculations mainly rely on three variables- the loan term or the tenure of the loan, the loan value and the rate of interest. The rate of interest is one of the aspects that comes determined by the bank.
Calculating using the PMT formula
This is a longer, tedious and round about approach to calculating the EMI on your personal loan. Here, you can run the PMT formula on Microsoft Excel to calculate the EMI, where
PMT is your EMI,
NPER or number of periods is the total number of payments for the loan
PV is the loan value or the principal
Rate is the rate of interest/12
The formula is
PMT (Rate, NPER, pv).
You can keep trying the formula for various combinations and then choose the one with the lowest EMI, though this is a roundabout approach that could be prone to human error.
Online EMI Calculator
Or a far easier option to calculate the affordable EMI, is using, for example, Bank of Baroda’s online personal loan EMI calculator.
Here, you will find a slider on the range of each of the three basic variables on your screen- the loan amount you are likely to need, the tenure or the repayment period of the loan that suits your finances and the rate of interest.
Now, the rate of interest is what you get from the bank, while the other two aspects, i.e., the loan amount and the tenure of the loan are the ones you can play around with here.
When you place the cursor on a particular value of the loan term, rate of interest and loan amount, the calculator throws up a monthly payment value, which is your EMI. You can move the cursor horizontally along the range provided to pick the various values.
Here’s why using a Bank of Baroda personal loan EMI calculator works.
If EMI is too high
You can pick a longer loan term or
You can make the loan amount smaller.
If you find the EMI is affordable or even lower than ideal then you can plan to repay faster by either
Taking a larger loan value or
A shorter loan term.