What is Home Loan Balance Transfer?
A Home Loan Balance Transfer is the process of the transfer of the entire remaining amount of loan/unpaid loan amount to another bank for the lower rate of interest. The bank, which in the first go approved the loan amount, will get the entire loan at full through the other bank and now your new loan will be carried by the bank, you opted for in the new case and all your EMIs will be incurred through the new bank. The Home Loan Balance Transfer is one of the features of almost every other bank in the country and if you are carrying your liability for paying up all your EMIs at regular time, you will have no trouble in getting this Home Loan Balance Transfer facility through other bank.
Eligibility for Home Loan Balance Transfer
To be eligible for a Home Loan Balance Transfer, you must follow certain guidelines as mentioned below:
The applicant’s age must be above 21 years and below 60 years at the time of application for Home Loan Balance Transfer. However, for Self-Employed individuals, the age limit is below 65 years.
When we talk about the loan amount, the entire final reimbursement is decided by the combination of several factors like current income of the applicant, age of the applicant, the number of co-applicants, other EMIs and the retirement age of the applicant, etc.
The applicant must have a clear history of around 18 months of unbroken EMIs on current home loan repayment.
A minimum work experience of 2 years is required in case of applicants with the condition that the last 1 year has been spent in the current organization. For those who are self-employed individuals, a minimum of 2 years in the same profession with the filing of the requisite ITR is a must.
Additionally, there are some banks, which require a definite gross family income and a clear credit history and a minimum of 700 credit score.
Advantages of Balance Transfer
The most important advantage of a home loan balance transfer is the saving of money. What holds relevance is the difference in interest rates between the two banks and the tenure of the loan along with the amount outstanding.
People opt for home loan balance transfer, if they see a significant benefit in the home loan interest rate and the saving of the EMIs. Here are the reasons of home loan balance transfer as opted by the people:
Reduction in the EMI
Reducing in the total interest as paid on the home loan
To avail attractive discounts, deals and benefits as offered by the other lender.
What is loan consolidation?
Loan consolidation is the process of consolidating all small loans into one bigger loan so that the payment of EMIs and maintaining all loans never become a troublesome. With the loan consolidation, one needs to pay the loan at a single place and need not remember various loan liabilities to be completed. Effectively, multiple loan debts are combined into a single and larger piece of debt, which comes with a more favorable payoff term like lower interest rates, lower EMIs, reduced tenure etc. The Loan Consolidation can be used by the borrowers as a tool to deal with different types of loans like personal loan debt, business loan debt, credit card debt and others.
Conditions for Loan Consolidation
For a loan consolidation, there are a few conditions, which almost every bank or lenders impose before approving a loan consolidation request of the applicant.
These conditions are:
Considered as one of the most important aspects, while going for any loan deals, this earning aspect plays an important in the decision of the approval or disapproval of the loan of any kinds, either it is a loan consolidation. In some cases, several banks require a certain debt to income ratio, and that the condition that the monthly disposable income must be between 10% and 15% of gross income.
Payment history is just another factor, which decides your final approval or disapproval for the loan. Making a late payment of your EMIs will have a negative effect on the banks and banks will hesitate in lending you money. Keep your balance sheets, clear with the timely repayment of your EMIs.
Stability of the applicant
The Stability of the applicant is one important factor along with the income of the applicant. Any lending agency wants to know if you have been working in the same place for more than two years and consider your duration of the employment status and the stability with the present employer.
Loan companies often hesitate in giving large sums of money to people without collateral and require a respectable amount of home equity to qualify for a debt consolidation loan.
Here are some examples of loan consolidation.
Loans like credit card debt, department store credit debt, medical bills, utility bills, various kinds of unsecured personal loans, select student loans and debts owed to collection agencies and many other loans can be consolidated into one consolidation loan.
Home loan Top up + Balance transfer scheme from ICICI Bank
The ICICI Bank presents you with an attractive option in the name of ‘Home loan Top up + Balance transfer scheme’, which has the facility to lower your EMI obligation on already existing Home loan from several NBFCs and other banks. It also entails the people to avail additional loans for several personal and other needs.
There are several key features of the Home loan Top up + Balance transfer scheme as offered by the ICICI Bank. Among those noteworthy features, some are as mentioned below:
A facility of 100% loan top up
Lower Interest rates
Special Interest rate for woman
Simplified documentation work
Option to access your Top-Up Loan as and when needed to meet personal requirements
Options to get benefited through additional funds against the security of your property
Depending on the property value, an option to access this loan for various personal requirements
Option to increase the loan amount
These Home loans Top up are helpful primarily in various aspects:
Furnishing your home
Buy consumer durables for your home and other such expenses
Education expenses of Kids
Marriage of kids
For Buying a new vehicle
Home loan Top up + Balance transfer scheme from ICICI Bank for Women
For women, the Home loan Top up + Balance transfer scheme from ICICI Bank for Women allows them with a good option to lower their EMI obligation on already existing Home loan from several NBFCs and other banks at much better rates comparatively. It entails them to avail additional loans for several personal and other needs at attractive rates.
To avail the Home loan Top up + Balance transfer scheme from ICICI Bank for women, the conditions in the form of stability and eligibility is of prime concern. The eligibility in the form of age eligibility and income source etc are some of the conditions, which holds prime importance to the eligibility to the Home loan Top up + Balance transfer scheme from ICICI Bank. Balance Transfer can be availed by the Indians residing in country, whether they are salaried or self-employed.
Here are eligibilities for Top up Loan:
Resident Indian: Salaried or Self-employed
Vintage of at least six months
Good repayment track record
How much you can save on interest rate with consolidation
The query ‘How much you can save on interest rate with consolidation’, in fact depends on the existing loan rates of interest and amount to be paid in your loan debt.
How to reduce tenure for your existing home loan with lower interest rate
There are several options available to the borrowers to plan their loan repayment. With the options increasing each day, the people have been provided with enough options to better manage their loans and on how to manage their loans so that the lifestyle doesn’t gets hampered in any way. In a way to reduce the EMI for your existing home loan with lower interest rate, several banks offer such options. You can Switch To A Lower Interest Rate In home loan top up + balance transfer option.
Following example illustrate how much you can save with this offer.
Assume you take a loan of 40 Lacs for 20 years @ 10% Rate of Interest. Your repayment will be like,
Total Interest Payable
Total Payment (Principal + Interest)
New Loan amount (Remaining Principle + Top up Amount)
EMI at New rate of 8.50%
Total Interest Payable
Total Payment (Principal + Interest)
Difference between two EMI
You can save Rs. 9,33,105 with this offer. Moreover you are getting additional amount with lower interest rate.
The Pradhan Mantri Awas Yojana (PMAY)
The The Pradhan Mantri Awas Yojana, an initiative by the Ministry of Housing and Urban, was launched on June 25th, 2015 with the aim to provide affordable housing to all. Previously, known as the housing for all, this scheme intends to provide affordable housing to all Indian Citizens by the year 2022.
Key Features of the Pradhan Mantri Awas Yojana
The key features of The Pradhan Mantri Awas Yojana are mentioned below:
Provide financial assistance to some of the weakest sections of society to upgrade or construct a house of at least respectable quality for their own living
To replace all temporary houses from Indian villages ASAP
Affordable Housing through Credit Linked Subsidy
In-situ Slum Redevelopment with the participation of private sector and using land as resource
Affordable Housing in Partnership with private and public sector
Beneficiary led house construction and enhancement
There are three criteria for eligibility under Pradhan Mantri Awas Yojana. These are mentioned below:
EWS (Economically Weaker Section)
Under this criterion, you need to provide enough proof to prove that you belong to the economically weaker section of the society. In a bid to define LIG and EWS, the government has set a fine line in terms of annual income, which will be used to distinguish if you belong to the EWS category or the LIG Group. Those Households with an annual income Up to Rs. 3 lakh will be defined under EWS.
LIG (Low Income Grade)
To get benefits under Pradhan Mantri Awas Yojana, LIG or Low Income Group people are also eligible and one must have the household income is between Rs. 3 lakh and 6 lakh in order to be classified under LIG and a valid proof for same.
In order to enlist themselves under the Pradhan Mantri Awas Yojana, the people belonging to the minority communities such as the SC/ST or OBC, will have to furnish adequate relevant documents to support their caste.
Those Women who either belong to EWS or LIG or minority communities will also be considered eligible for Pradhan Mantri Awas Yojana.
To avail all benefits under the Pradhan Mantri Awas Yojana, the only condition is to provide valid documents in support of the annual income and for the caste.
Who can benefit?
All people belonging to Economically Weaker Section, Low Income Grade, Minority Groups and women are eligible to avail the benefit under Pradhan Mantri Awas Yojana. For Beneficiaries of Economically Weaker section and Low Income Group seeking housing loans, would be eligible for an interest subsidy at the rate of 6.5% for tenure of 15 years or during tenure of loan whichever is lower on the initial Rs. 6 Lakh. Also to mention, any additional loans beyond Rs. 6 Lakh, will be at non subsidized rate.
Interest Rates for woman
For women, the interest subsidy at the rate of 5.5% for tenure of 15 years or during tenure of loan whichever is lower on the initial Rs. 6 Lakh. Also to mention, any additional loans beyond Rs. 6 Lakh, will be at non subsidized rate.
A wonderful concept for those who are struggling to meet their dreams of owning a home of their own, this Pradhan Mantri Awas Yojana will surely help them in getting a feather to their dreams. For the Pradhan Mantri Awas Yojana the government has sanctioned more than Rs. 81,975 crore and works is continuing day and night to meet the demands of affordable housing.