Balance Transfer (BT) is a product that’s banks provide to customers who would like to switch from one bank to another bank to get benefited by the increasing home loan interest rates. A customer can transfer his/her loan from a bank to another by using this product. The terms and conditions for this product are same and the process goes same as like of fresh home loan application.
Before going for a balance transfer a customer need to arrange his/her person, income and property documents as he did before purchasing the property. Along with these documents the customer need to arrange his/hers home loan accounts one year repayment track, outstanding letter and List of Documents deposited letter from the previous bank. The customers need to submit all these documents to the present bank where he/she would like to switch his home loan. The process is same and starts with verification of customer’s home and office addresses, Pay slips, Bank statements and finally property documents with a visit of technical valuer to the property. The property need to support to the balance transfer the home loan otherwise the loan application will be rejected. There are cases where the property doesn’t support the loan amount applied even the loan is same as in the previous bank.
Once the process is done then the present bank will issue a pay-order in the name of the customer stating his loan account no on the pay-order. Usually it takes 8-15 working days to receive the original documents from the previous bank to present bank. The customer starts paying his/her EMI from the second month of the disbursement date. The balance transfer will give Income Tax benefit to the customer under section 80© of Income Tax act for Interest paid on home loan up to a maximum of 150000.