Home Loan Balance Transfer: Interest Saving & Top-Up Loan

Switch Lender! Save Big on Interest! Grab Top-Up!

Call now!

Avail home loan balance transfer facility and switch loan from one lender to another hassle-free. Get the interest rates reduced and grab additional benefits like Top-Up Loan and fulfill the dream of getting another loan with ease.

---

How Home Loan Balance Transfer Benefits The Borrowers?

By transferring the loan at a lower rate, the borrower can reduce the EMI and the overall interest outgo. For instance, if the current EMI on ₹30 lakh at 9.5% for 10 years is approximately ₹39,900, transferring to a bank offering 7.2% could reduce the EMI to around ₹34,000, saving about ₹5,900 per month.

Balance Transfer Savings Calculator

Breakup of Interest Savings on Balance Transfer

Loan Details

Existing Loan

• Principal: ₹70,00,000
• Interest Rate: 9.5%
• Tenure: 20 years (240 months)
• EMI: ₹65,249

New Loan (Post Balance Transfer)

• Interest Rate: 8.4%
• Tenure: 20 years (240 months)
• EMI: ₹60,305

Total Payment Over Loan Period

Old Loan Total Payment
= ₹65,249 × 240 months = ₹1,56,59,760

New Loan Total Payment
= ₹60,305 × 240 months = ₹1,44,73,200

Breakup of Savings

Total Savings
= ₹1,56,59,760 – ₹1,44,73,200 = ₹11,86,560 (matches the given ₹11,86,528 with rounding difference)

Breakup:

• Principal: ₹70,00,000 (same in both)
• Interest Paid in Existing Loan: ₹1,56,59,760 – ₹70,00,000 = ₹86,59,760
• Interest Paid in New Loan: ₹1,44,73,200 – ₹70,00,000 = ₹74,73,200

✅ Interest Savings: ₹86,59,760 – ₹74,73,200 = ₹11,86,560

---

Home Loan Balance Transfer Interest Rate by Top Banks

Here is a comprehensive summary of the Interest Rate and other charges of some of the top banks in 2025.

Bank Name	Home Loan Balance Transfer Rate	Processing Fee	Top Up Loan	Eligibility
HDFC Ltd	8.50% – 9.00 % pa	Up to 0.50% of the loan amount or ₹3,000, whichever is higher, plus taxes	YES	Check Eligibility
IDFC First Bank	8.85% pa	Up to 3% of the loan amount, plus applicable taxes	YES	Apply Now
Bank of Baroda	8.50 % pa	0.35% of the loan amount, subject to a maximum of ₹15,000, plus applicable taxes.	YES	Check Eligibility
Union Bank of India	8.75 % pa	0.50% of the loan amount, capped at ₹15,000, plus GST	YES	Apply Now
Karur Vysya Bank	9.48 % pa	₹5,000 + GST	YES	Check Eligibility
Federal Bank	10.15 % pa	0.50% of the loan amount, plus GST	YES	Apply Now
State Bank of India	8.25 % pa	(0%) for eligible applicants.	YES	Check Eligibility

Key Takeaways (Bank-wise)

1. HDFC Ltd
   • Interest Rate: 8.50% – 9.00% p.a.
   • Processing Fee: Up to 0.50% or ₹3,000 (whichever is higher) + taxes
   • Top-Up Loan: ✅ Available
   • 💡 Good balance between rate and fee; slightly higher ceiling in rate.
2. IDFC First Bank
   • Interest Rate: 8.85% p.a.
   • Processing Fee: Up to 3% of the loan amount + taxes
   • Top-Up Loan: ✅ Available
   • ⚠️ High processing fee; suitable only if you’re getting additional benefits.
3. Bank of Baroda
   • Interest Rate: 8.50% p.a.
   • Processing Fee: 0.35% of the loan amount, max ₹15,000 + taxes
   • Top-Up Loan: ✅ Available
   • ✅ Lowest fee among the bunch with a competitive rate.
4. Union Bank of India
   • Interest Rate: 8.75% p.a.
   • Processing Fee: 0.50%, capped at ₹15,000 + GST
   • Top-Up Loan: ✅ Available
   • 💼 Balanced option; decent rate and capped fee.
5. Karur Vysya Bank
   • Interest Rate: 9.48% p.a.
   • Processing Fee: ₹5,000 + GST (flat)
   • Top-Up Loan: ✅ Available
   • ⚠️ Higher rate; fixed moderate fee—less competitive overall.
6. Federal Bank
   • Interest Rate: 10.15% p.a.
   • Processing Fee: 0.50% of the loan amount + GST
   • Top-Up Loan: ✅ Available
   • ❌ Highest interest rate; consider only if other terms are favorable
7. State Bank of India (SBI)
   • Interest Rate: 8.25% p.a.
   • Processing Fee: 0% for eligible applicants
     🥇 Lowest rate + no processing fee = most cost-effective option.

---

Steps to Follow to Avail Balance Transfer

---

What is The Best Time to Avail a Home Loan Balance Transfer?

Ideally, one must opt for Balance Transfer in the early years of loan tenure particularly for floating-rate interest loan. Repo Rate cuts directly impact interest rate. So, any repo rate cut in the early years can make borrowers save significant interest.

---

How Can Your Loan Balance Transfer Backfire on You?

Before processing what a home loan transfer offers, think twice—it’s not always the best move. Here are six scenarios where it might be a bad idea:

1. Late Payments: If you struggle with on-time payments, a home loan transfer might backfire. Late payments could attract penalties with high rates. Stick to an on-time payment plan with your current home loan.
2. Quick Repayment: If you can pay off your loan in a few months, a transfer might not be worth it. Transfers take time, and you’ll likely pay 3-5% of your balance as a home loan balance transfer interest rate. Consider the numbers. Sometimes sticking to your existing loan with larger payments makes more sense.
3. Overspending Temptation: If you’re prone to overspending, a transfer might worsen things. Transferring balances won’t help if you keep adding new debt. Get your spending in check, follow a budget, and aim to pay more than the minimum on your loan.
4. Less-than-Great Credit: To snag a 0% intro APR on a loan transfer, you usually need good credit. If your credit isn’t top-notch, you might still qualify for the transfer but miss the 0% deal. Every new application dings your credit, so be clear on the terms.
5. Upcoming Financing Plans: Planning to get a mortgage or other major loan soon? Hold off on a transfer—applying could temporarily dent your credit score, affecting your loan approval chances or interest rates.
6. Unmanageable Debt: If your debt feels overwhelming, a transfer won’t solve it. The low promo rate is temporary, and if you clear it in time, you’ll avoid higher rates. Consider nonprofit credit counseling for a long-term solution. You can also use a home loan transfer calculator to compare the interest rates of different loans.

Remember, a loan transfer is a tool, not a cure-all. Assess your situation and explore options wisely.

---

The Fees and Charges Associated with a Home Loan Balance Transfer

• Processing Fee: Charged by the new lender to process your balance transfer application, usually ranging from 0.25% to 2% of the loan amount, though some lenders may charge up to 4% or even 6% in certain cases. For example, HDFC charges up to 0.5% or Rs. 3000 whichever is higher

• Prepayment or Foreclosure Charges
• For floating rate loans, foreclosure charges are generally nil.
• For fixed-rate loans, foreclosure or part-prepayment charges can be up to 4% of the outstanding principal.
  

• Bounce Charges: Applicable if EMI payments bounce, varying by loan amount (e.g., Rs. 500 to Rs. 10,000 depending on loan size).
  
• Other Charges: Some lenders may impose penal charges, interest and principal statement fees, or part-prepayment fees depending on the loan terms.
  
• Negotiability: Many lenders are open to negotiating or waiving processing fees to attract borrowers, so it’s advisable to discuss charges before finalizing.

To sum up, the main charges to expect in a home loan balance transfer are processing fees (0.25%–4%), possible foreclosure charges for fixed-rate loans (up to 4%), and minor administrative fees. Always compare these costs against the interest savings to ensure the transfer is financially beneficial.

---

Eligibility for Home Loan Balance Transfer

For a home loan balance transfer, an applicant has to fulfill certain eligibility criteria. Let’s have a look at the eligibility criteria for home loan balance transfer.

For an Individual Applicant

Age:

• The age bracket of a salaried applicant is between 18 to 60 years
• For a self-employed professional, the age requirement is from 18 to 65 years

Income:

• For residents of Delhi, Bangalore, Mumbai, Pune, and Chennai a minimum income of Rs. 20,000/month
• A minimum income of Rs. 15,000/month for residents of other cities

Minimum Qualifications:

• The applicants employed with a private limited company or a  partnership firm should have a Bachelor’s degree
• No minimum qualification is required for a public limited company or Government or MNC or public sector company

For a Partnership Firm/LLP/Indian Company

• A minimum net income of:

                    – Rs. 2,40,000 p.a. For firms/LLPs/Companies in Delhi, Mumbai, Bangalore, Pune and Chennai

                   – Rs. 1,80,000 p.a. for firms/LLPs/Companies of other  cities

• Should have been in existence for at least 3 years

For a Hindu Undivided Family (HUF)

• Should have been in existence for at least 3 years.
• IT returns of at least 3 years is mandatory.
• The applicant or the co-applicant must be the Karta of the HUF
• The minimum net income of:

                    – 2,40,000 per annum for the HUFs in Delhi, Mumbai, Bangalore, Pune, and Chennai

                   – 1,80,000 per annum for the HUFs in other cities

---

Documents Required for Home Loan Balance Transfer

When you transfer home loan to another bank, the bank requires you to submit certain documents to validate your creditworthiness and financial stability. Documentation is an important aspect for your loan eligibility. Now, the documents required for home loan balance transfer differ according to the type of applicant.

For Self-Employed Professional	For Salaried Employee
Proof of Income and Banking Details – Current account statement – Income tax return – Balance sheet and P&L statements (all attested by CA)	Proof of Identity and Residence PAN/Voter ID/Passport/Driving License
Identity and Residence Proof – Passport/PAN/Voter ID/Driving License	Income proof and Banking Details Bank statements/Salary Slips/Latest Form-16 and IT returns
Signature Proof Proof of educational qualifications	Signature Proof Proof of educational qualifications

---

What is Home Loan Refinancing?

Changing the terms and circumstances of an existing loan with the same lender is called refinancing a home loan. Securing improved conditions is the aim, frequently through interest rate reduction, loan tenure extensions, or EMI structure modifications.

This is how it operates:

• A borrower approaches their present lender to bargain for improved loan conditions.
• The lender might consent to change other loan terms or to reduce the interest rate.
• The borrower keeps making payments to the same lender and updates their current loan to reflect the new terms.

Scenario to Choose Between Home Refinance and Balance Transfer

Here is comparative study of balance transfer and home refinance.

Factor	Home Loan Balance Transfer	Home Loan Refinance
Loan age requirement	After 12-18 months of existing loan	Any time, but better if rates have dropped significantly
Loan tenure	Substantial remaining tenure, not near loan end	Can shorten or extend tenure as per financial goals
Interest rate	Lower interest rate from new lender	Lower interest rate or switch between fixed/floating
EMI flexibility	Lower EMI or longer tenure options	Lower EMI or shorter tenure options
Loan terms flexibility	Better repayment options, part-prepayment facility	Improved terms including loan amount and tenure
Cost consideration	Transfer costs justified if large outstanding principal	Refinancing costs justified if savings exceed costs
Financial situation	Useful if current loan terms are unfavorable	Useful if credit score or income has improved

3 Ways in Which a Home Loan Transfer Can Impact Your Credit Score Include

Minor, Temporary Dip: When you opt for a home loan balance transfer, there’s a temporary dip in your credit score. It occurs because your existing loan is closed, and a new one is opened, causing a brief disruption.

Changes in Credit History Length: Opening a new loan account can reduce the average age of your credit accounts, which may negatively affect your credit score initially.

Credit Utilization and Account Balances: Unlike credit cards, home loans do not impact credit utilization ratio in the same way, but consolidating your loan under a new lender can simplify your credit profile, potentially benefiting your score if managed well.

---

Reduced Interest Rates

Because house loans typically have long terms, you can find a lender who would give you a better interest rate than the one you currently have. A balance transfer can be a good choice in such a circumstance.
To make sure you are truly benefiting from a low interest rate and to understand the math behind it, utilize our home loan balance transfer calculator to quickly compare rates.

Fixed and Floating Interest Rates

There are two sorts of interest rates for home loans: fixed and floating. You will pay the same interest for the duration of a fixed-interest home loan. On the other hand, floating interest rates are dependent on various factors like inflation, repo rate, market conditions, and other factors.

Longer Tenure

This is yet another important feature that increases the appeal of a house loan balance transfer. Let’s take an example where you have a 10-year home loan remaining. But now you have other responsibilities, including your kids’ schooling, your health, and other expenses. You might want a home loan transfer in this case to increase the tenure by an additional 15 or 20 years. In such a way, you can reduce your EMI and allocate your money to other obligations.

Credit Score Improvement

Your credit score is largely determined by how well you repay debts. Therefore, your credit score may be suffering if you are having difficulty repaying the loan and have been frequently missing your EMI payments. In these situations, a home loan balance transfer might be the best option.

Top Up Loan Facility

You may seek for an additional loan from your new lender by using a top-up during a balance transfer. You can receive additional funds with this facility to cover your needs. Further, lenders provide this facility at competitive interest rates, which makes it a feasible and affordable choice.

Better Customer Service

You could opt for a home loan balance transfer to also get better customer service in addition to financial benefits. For example, you might find it challenging to make repayments if the customer support provided by your present lender is confusing or unhelpful.

---

The Future of Home Loan Balance Transfer: Trends and Predictions

In India, house loans will focus on innovation, customer-centricity, and accessibility in the future. Borrowers should anticipate speedier money availability, more streamlined procedures, and personalized options as technology continues to transform the lending industry.

The intersection of digital transformation, data analytics, and specialty lending products is revolutionizing how Indians fund their dream homes.

It gives borrowers the power to decide wisely following their financial preferences and aims. Prospective homebuyers now have fantastic chances to more easily and confidently navigate the intricacies of the Indian real estate market thanks to the changing landscape of house loans.

---

Customer Reviews

⭐⭐⭐⭐⭐

“Saved over ₹7 lakhs in interest – worth the effort!”
— Rakesh Mehta, Pune

“I had taken a ₹45 lakh home loan in 2018 from a private bank at 9.2% interest. Even after RBI rate cuts, my bank was slow to pass them on. I heard about balance transfer from Credit Dharma and decided to explore it. After checking rates and using a few comparison portals, I shifted my loan to SBI in 2024 at 8.25% interest. The process took about 2 weeks, and I paid around ₹11,000 in fees, including legal and valuation charges. But it was totally worth it — I’m now saving about ₹6,800 monthly in EMI and over ₹7 lakhs in total interest over the remaining tenure. Plus, I got an additional ₹5 lakh top-up loan at the same rate for home renovation. I highly recommend it to anyone stuck with a high-interest loan!”

⭐⭐⭐⭐⭐

“Slashed my interest by over 1.5% – saved ₹9 lakhs over the tenure!”
— Priya Sharma, Bengaluru

“I took a home loan of ₹60 lakhs in 2019 at an interest rate of 9.1%. Over time, I noticed that other banks were offering much lower rates, but mine barely reduced. I researched online and ended up contacting Credit Dharma and found that ICICI Bank was offering 7.6%. I initiated the balance transfer in mid-2024. The process was seamless and digital and the team was supportive. The total cost, including processing and legal fees, was about ₹12,000. In return, my EMI dropped by nearly ₹5,000 a month! Over 15 years, that’s almost ₹9 lakh saved in interest. The cherry on top—I got a ₹10 lakh top-up loan which I used to redo my kitchen. If you have a good credit score and stable income, don’t think twice!”

---

Conclusion

We, at Credit Dharma, work as a one-stop solution for you and compare the interest rate and processing charges of all the banks and recommend you the best suitable bank based on your credit profile. Choose your Home Loan Balance Transfer and top-up loan with us.

---

Frequently Asked Questions