Help Center
Locate us
How to Transfer Home Loan from One Bank to Another
Experience the all-new Kotak Netbanking
Simpler, smarter & more intuitive than ever before
Popular Products
Show More
Quick Help
Show More
Frequently Asked Questions
Show More
For Kotak Bank Customers
For Kotak811 Customers
Experience the all-new Kotak Netbanking Lite
Simpler, smarter & more intuitive than ever before. Now accessible on your mobile phone!
The complete process typically takes 15-30 days, depending on documentation completeness and lender efficiency. Online applications and digital verification can expedite the timeline.
Yes, you can transfer home loan from one bank to another multiple times, provided you meet eligibility criteria and the financial benefits justify the costs involved.
Most lenders require at least 12-18 months of regular EMI payments on your existing loan before considering a home loan balance transfer application.
No, tax benefits under Section 80C (principal repayment) and Section 24(b) (interest payment) continue with the transferred loan, subject to overall annual limits.
Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
How to Transfer Home Loan from One Bank to Another
Introduction
A mere 1% reduction in interest rates could save you lakhs over your loan tenure. Yet, many borrowers continue paying higher EMIs, unaware that transferring your home loan to another bank is often financially rewarding.
At Kotak Mahindra Bank, we understand that your financial needs evolve, and so should your loan terms. A home loan balance transfer can unlock significant savings whilst providing better service and flexible repayment options.
This guide walks you through the complete process of transferring your home loan, helping you make an informed decision that benefits your long-term financial health.
Table of Content
What is a Home Loan Balance Transfer?
A home loan balance transfer is the process of moving your existing home loan from one bank or financial institution to another. Also known as home loan refinancing, this facility allows you to shift home loan obligations to a lender offering better terms, lower interest rates, or improved customer service.
The facility is particularly beneficial for borrowers seeking to reduce their monthly EMI burden or those who want to take advantage of falling interest rates in the market.
Why Should You Transfer Your Home Loan?
Transferring your home loan can save thousands in interest costs while providing access to better loan terms and customer service. The optimal timing depends on factors like your loan tenure, current interest rate environment, and improved credit profile.
Key Reasons to Consider Transfer
Reason
Description
Financial Impact
Lower Interest Rates
The most compelling reason to transfer home loan from one bank to another is securing a lower interest rate
Even a 0.5% reduction can save ₹2-5 lakh over a 20-year loan tenure. On a ₹50 lakh loan, a 1% rate reduction lowers EMI by ₹3,000-4,000 monthly
Better Customer Service
Poor customer support, delayed responses, or lack of digital banking facilities
Improved borrowing experience with superior service quality and faster query resolution
Top-up Loan Facility
Additional funding through top-up loans during the transfer process
Access to extra funds at competitive rates for home renovation, education, or other financial needs
Flexible Repayment Options
Step-up or step-down EMI options available with new lenders
Align payments with income growth or changing financial circumstances
Need help calculating potential savings? Use our home loan EMI calculator to see how much you could save with a balance transfer.
What Documents Do You Need for Home Loan Transfer?
The home loan transfer process requires documentation from both your current and new lender to ensure the transition smoothly.
Documents from Current Lender
Documents for New Lender
How Do You Transfer Your Home Loan Step by Step?
The home loan balance transfer process involves seven key steps, from researching lenders to final loan disbursement. Following this structured approach ensures smooth transition while minimising delays and complications.
Step 1: Research and Compare Lenders
Evaluate multiple banks offering home loan balance transfer facilities. Compare interest rates, processing fees, and additional benefits like top-up loans. Use online comparison tools and consult with relationship managers to understand complete terms and conditions.
Step 2: Apply for Balance Transfer
Submit your application to the chosen new lender with required documents. Ensure all information provided is accurate to avoid delays.
Step 3: Obtain NOC from Current Bank
Formally request your existing lender for a ‘No Objection Certificate’. The NOC should include outstanding balance details and confirmation that property documents will be released upon loan closure.
Step 4: Submit Documents to New Lender
Provide the NOC along with all required documents to your new lender. The bank will verify your financials, assess your repayment capacity, and conduct property valuation if required.
Step 5: Property Verification and Technical Evaluation
The new lender will conduct legal verification of property documents and may arrange for technical evaluation to determine current market value.
Step 6: Loan Approval and Sanction
Upon satisfactory verification, the new lender will approve your balance transfer application and issue a sanction letter detailing the approved amount, interest rate, and terms.
Step 7: Loan Disbursement and Account Closure
The new bank directly pays your outstanding amount to the current lender. Your old loan account gets closed, and you receive confirmation. Property documents are transferred to the new lender, and you begin making EMI payments as per the new terms.
Ready to explore better rates? Check Kotak's competitive home loan balance transfer options and discover how much you could save.
What Are the Benefits and Drawbacks of Balance Transfer?
Home loan balance transfer offers significant advantages such as reduced EMIs and access to additional funds, but also comes with certain limitations and costs. Weighing these factors carefully helps you make an informed decision about whether transferring your loan aligns with your financial goals.
Benefits
Description
Significant Interest Savings
Lower interest rates directly translate to reduced EMIs and substantial savings over the loan tenure.
Access to Additional Funds
Top-up loans during transfer provide extra liquidity for home improvement, education, or other needs.
Improved Loan Terms
Negotiate better terms like flexible EMI options, longer tenure, or step-up/step-down facilities.
Enhanced Customer Experience
Switch to lenders offering superior digital banking services.
Drawbacks
Description
Processing Costs and Time
Transfer involves processing fees, documentation charges, and time investment.
Credit Score Impact
Multiple loan enquiries and account closures may temporarily impact your credit score.
Reset of Loan Benefits
Some tax benefits or special schemes with your current lender may not transfer.
Documentation Requirements
Extensive paperwork and verification processes can be time-consuming.
Conclusion
Transferring your home loan to another bank can reduce interest costs and improve the overall value of your loan—provided the timing and conditions are favourable.
To make the most of a balance transfer, ensure that your remaining loan tenure is sufficient, the interest rate difference is at least 0.5–1%, and the potential savings exceed the charges involved.
The process usually takes 15–30 days with proper documentation. While processing fees may apply, the long-term savings—often ₹2–5 lakh—can make the effort worthwhile.
A balance transfer is most beneficial when market rates are lower, your credit score has improved, or your current lender’s service no longer meets your expectations.
You have already rated this article
OK