How to use Home Loan Balance Transfer to reduce EMI

A home loan is a must to build your dream home. You also get a rebate in tax for the interest you pay on your Home Loan repayment. Most of the time, the interest rate is quite low too.

But this is not always the case. Sometimes, due to RBI policy, the rate of interest on a Home Loan can even go lower than what you have signed up for. In such cases, you are paying higher EMI as compared to what is possible. This is where Home Loan Balance Transfer comes into the picture.

What is Home Loan Balance Transfer

Home Loan Balance Transfer is the process of transferring your home loan to other lenders for a lower rate of interest. Ideally, a home loan customer should keep checking interest rates on a quarterly or half-yearly basis. This can also be done when there is a major policy announcement by RBI or the government.

If the difference in interest rate is good enough, then you can proceed with the Home loan balance transfer process. Home loan BT means, you transfer your home loan balance to a new lender. In the process, the new lender pays the outstanding amount of your loan to your existing lender and takes over the loan – at lower EMI payments.

This facility is also used if you need a top-up on your existing Home Loan (Home Loan Balance Top-Up) for any unexpected expense.

How to proceed with Home Loan Balance Transfer

There are two ways to proceed with a Home Loan balance transfer.


You can contact different lenders offering lower rates of interest and compare their terms and conditions. Then you can get in touch with their loan processing team to get the paperwork done.

This approach might require a little bit of legwork as most banks prefer new home loans as compared to balance transfers.

Our Serviced Loan transfer

We at Apekshrupyaa can assist you in your home loan balance transfer free of cost. Especially when you don’t have time to track down the rate of interest and conditions offered by different lenders, our service is quite handy.

Our core business as third-party financial services distributors is to study loan parameters, rates, and the entire loan ecosystem on regular basis and thus we are best equipped to offer you the best choices.

We can also offer you a home loan balance top-up on your existing home loan at no extra charges.

Let’s look a quick look at how to proceed with the home loan balance transfer process.

Documents required for Home Loan Balance Transfer

For Balance transfer, the first step is to check your balance transfer eligibility. This is mainly a procedural requirement as properties with existing home loans are rarely rejected for loan transfer. For this, you need all the documents required for a new home loan-

  • Proof of Identity,
  • Address,
  • Income Profile,
  • Property title,
  • Primary lender Home Loan contracts.

This step is usually completed within 2 days provided all the documents are ready to be presented.

Once your case is approved, then you have to mail the existing lender for the exact outstanding loan amount.

New lender will pay your existing lender for the outstanding amount and get the property papers released. In the meantime, your new lower EMI starts.

How much can you save with Home Loan Balance Transfer

With a balance transfer, you can save on home loan EMIs in two ways –

  1. Lower EMIs – In this case, the tenure of your home loan stays the same, and the EMI that you pay per month goes down. In most cases, the saving is more than 10% as compared to the existing EMI.
  2. Shorter Duration – The other approach you can use is to keep the EMI the same but reduce the duration of your Home Loan. This duration is calculated using the lower rate of interest. For example, your home loan tenure can reduce from 240 months to 170 months only. That is saving of full 70 months of EMIs.

Is it a good idea to balance transfer home loan?

It is good idea to balance transfer home loan in two cases –
1. Your outstanding loan amount is still high and you get offer for better rate of interest, EMI and term of the loan duration.
2. You need a top up on your existing home loan. When you accept home loan balance transfer, you also get offer to top up your home loan amount.

What is the process of home loan balance transfer?

If you plan to do home loan balance transfer on your own, here are the steps that you need to follow –
1. Inform your current lender about your intention to transfer your home loan. You will get an updated statement of accounts (SOA) with outstanding loan amount and fees that you need to pay.
2. Hand over your loan documents to new lender with copy of loan documents and statement of accounts from old lender.

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