Know-How Does the Housing Loan Balance Transfer work?

The construction or purchase of a house is one of life’s most important goals. 

Since buying or constructing a house can be a costly affair, people often rely on home loans to fulfill their dreams. However, quite often, you may realize that your lender, who promised the lowest home loan interest rates, is overcharging. Hence, you have to pay more than what you initially thought.

At this point, it is good to know that, when you apply for a home loan with a reputed lender like PNB Housing, in most cases, your EMIs remain the same as the home loan calculator shows you. However, some lenders treat this figure as tentative and add taxes and surcharges to it, which increases the final EMI amount.

If such a thing ever happens to you, you may consider transferring your loan balance to another lender who might be offering a lower interest rate than your current lender.

So, how does the home loan balance transfer work, and how can you benefit from it? Read on to find out.

The Mechanism of Home Loan Balance Transfer

The home loan balance transfer is a nine-step process. Here is what you need to do to reduce your financial stress. 

  • Find a lender who is offering lower home loan interest rates than your current lender.
  • Use an online home loan calculator to check the amount you will save.
  • Approach your current lender with a request for a balance transfer. Your lender may negotiate with you regarding the interest rates. Opt for a balance transfer only when you are convinced that it is indeed beneficial.
  • Your current lender will issue a No-Objection Certificate, Consent Letter, Foreclosure Letter, property documents, and a statement of the loan account.
  • Approach your new lender and fill up the home loan application form. You may also need to attach documents like identity proof, age proof, and address proof, and other documents like the income certificate, bank account statement, and property documents. You will also have to submit the documents received from your previous lender.
  • The new lender will verify your documents and evaluate your credit score. They do it for checking your eligibility. To be safe, you can also check your eligibility by using a home loan calculator.
  • On finding your application proper, the lender would approve the loan and send a cheque containing the unpaid principal amount.
  • Your current lender will transfer the loan papers to your new lender and cancel any post-dated cheques you submitted while availing the home loan.
  • Your balance transfer is complete. You may now enjoy bigger savings.

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The Features You Can Expect From The New Lender

When you choose a home loan balance transfer scheme, your new lender may offer you several benefits. Here are some of them:

  • Higher savings due to lower home loan interest rates
  • Exclusive discounted interest rates for women applicants
  • Facility to avail a low-interest top-up loan
  • Lenders. like PNB Housing, offer home loans with no hidden charges
  • Flexible repayment options
  • App-based or online facility to manage your account conveniently.
  • No prepayment or foreclosure charges
  • Doorstep service delivery facility

Hence, with the home loan balance scheme, you can open yourself up to a new world of opportunities and much higher savings.


Getting your home loan’s balance transferred can be a blissful experience. However, it is better to use a home loan calculator to determine how much you are actually saving. Often, your lender may impose a foreclosure penalty, which can be 1-2% of the amount you will pay as interest. Hence, to reap the maximum benefit from your home loan, you should calculate your savings in advance and sign the application form only when you are convinced. 

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