Mortgage loans are more popularly known as property loans or loans against property in India. These are loans people avail of against a residential or commercial property they own. Some lenders even sanction these loans against the land.

The borrower and the lender enter into a loan agreement in which the loan borrower promises to return the borrowed amount along with interest over a pre-agreed loan tenor. Failure to do so can lead to the lender slapping the borrower with late fees.

In the worst-case scenario, if a loan borrower defaults on loan repayment, the lender can also sell the pledged collateral and recover losses. Loans against property offer many benefits that no other loan option does. 

Low property loan interest rastes make these loans a promising loan option. The loan tenor is long and the loan amount is high, high enough to allow borrowers to fulfil their various needs and desires. There are no end-use restrictions on the funds availed of.

Further, borrowers can also avail of tax benefits and can even consider a loan against property balance transfer if they are unhappy with their current lender and their service or their loan terms and services. 

You must be wondering what is a loan against property balance transfer. Individuals currently repaying a mortgage loan can transfer the remaining balance on their mortgage loan to another lender willing to refinance the loan on more beneficial loan terms and conditions.

In the majority of cases, loan borrowers transfer their loans to benefit from the latest or lower mortgage rates in India. If lower interest rates are guiding your choice for a loan against property balance transfer, it is best to consider an internal balance transfer.

If your current lender decides to entertain your request to be switched to a lower interest rate, you will be saved from having to pay the loan against property balance transfer fee.

However, if you are tired of your current lender's service or want to avail of a top-up loan or if your current lender isn't willing to refinance your loan on better loan terms and conditions, you should consider an external loan against property balance transfer. Let us now walk you through the loan against property balance transfer process. 

Loan Against Property Balance Transfer Process: Everything You Need to Know 

1. If you are considering the loan against property balance transfer option, one of the first things that you must do is check the eligibility requirements. Not everyone qualifies for a mortgage loan balance transfer. Go to your preferred lender's website and read about the property balance transfer qualifying criteria. 

2. If you meet the qualifying criteria, start looking for a lender known to have a good reputation in the market. You should look for a lender based on what you are looking for. If you are looking for low mortgage rates in India, align your search in that direction. If you are looking for a lender known for better customer support, look for a lender who has been in the market for at least a few years and has a good reputation.  

3. After deciding on the lender, the next thing to do is inform your current lender of your desire to opt for a loan against property balance transfer. Write to your current lender and request them to release all the documents you had submitted at the time of applying for the loan along with a copy of your repayment history. You will need these documents while applying for a loan against property balance transfer. Also, use the LAP loan calculator to see how your EMIs will change and whether or not you can afford these new EMIs. 

4. Reach out to your new lender and apply for a loan against property balance transfer. Submit all the mortgage loan document needed to facilitate the transfer and wait for the new lender to revert. 

5. If your new lender accepts your request for a loan against property balance transfer, pay the required fees and charges. 

6. Your new lender will now pay off your current lender. Once this is done, your old lender will have to release all the original documents that you had submitted at the time of applying for the loan and that they had in their possession. 

7. Once this is done, your loan against property balance transfer will be considered complete and you will need to pay your monthly EMIs to your new lender.

Conclusion

Balance transferring your loan is easy if you are well prepared. However, borrowers must always choose to balance transfer their loan after carefully assessing doing a cost-benefit analysis and ensuring that the balance transfer will indeed prove helpful.