Balance Transfer

So when it comes to home loans, a balance transfer (also called a home loan takeover or refinancing) means moving your outstanding home loan amount from your current lender (like a bank or NBFC) to a new lender offering a lower interest rate or better terms.

Home Loan Balance Transfer – How it Works:

Let’s say:
• You have a ₹40 lakh home loan at 9% interest with Bank A.
• You find Bank B offering 7.5% interest.
• You apply for a balance transfer.
• Bank B pays off your loan to Bank A, and now you repay Bank B at the lower rate.

Why people do a balance transfer:
• To get a lower interest rate (biggest reason)
• To reduce EMIs (monthly payments)
• To save lakhs over the loan tenure
• To get top-up loans or better customer service

Things to consider before switching:
• Processing fees & other charges (legal, technical, admin)
• Your current lender may charge a foreclosure or transfer fee
• The remaining loan tenure (transfers make more sense early on)
• Your credit score and eligibility for the new loan
• Hidden clauses or fees in the new lender’s agreement

Example of Savings:

On a ₹50 lakh loan over 20 years:
• At 9%, total interest = ~₹58.5 lakh
• At 7.5%, total interest = ~₹46.3 lakh
• You save ₹12.2 lakh just by transferring!