Transfer of LAP loan from one bank to another has been encouraged these days as it provides the borrowers the option to opt to go with a lender that offers a lower interest rate.
Can we transfer LAP from one Bank/NBFC to another?
Yes, there is a provision for transferring your loan against property from one bank to another if you feel like the interest rate charged by the existing bank is high for no reason. This is the best way to enjoy low-interest rates while taking the full benefit of the LAP. The added benefit of the transfer is that it will increase your repayment period. The best part is that the processing time is quite fast. This is the reason why banks and NBFCs in India are encouraging borrowers to go for the transfer.
If you have taken a mortgage loan in India and are looking to transfer it from an existing NBFC or bank to another institution, this post explains how it is processed.
Let’s get started.
What is a Loan Against Property Transfer?
Many times it happens that you take a loan from an NBFC, seeing that the institution is providing lower mortgage loan interest. However, after a while taking the loan, you realize that another lender offers the same loan at a much lower rate of interest than your existing loan provider. At this time, you may regret taking this loan because you are paying extra interest rates when some other lender is offering the same option but at a lower interest rate. Now, you have the option to switch your loan amount from your existing loan provider to the new one of your choice. This LAP transfer is done quickly, without much of a hassle and that too, with a minimal processing fee.
Once the transfer is done, you will continue paying the monthly installment, but to the new lender that is offering a lower interest rate. And the best part is that you don’t have to pay the amount that you have already paid to the previous lender. You will start with the remaining amount. Above all, if you want to increase your loan amount along with the transfer, there are lenders that provide this provision. The additional loan amount you get for your existing LAP is known as the top-up loan. So, when you transfer your existing LAP to another bank account, you will get the desired interest rate as well as the option to top up your loan.
Features of Loan Against Property Balance Transfer
NBFCs and banks offer a loan against property balance transfer to those borrowers who fulfill their required eligibility criteria. The eligibility requirements change from lender to lender. The borrower’s profile will also be considered to determine whether or not they are eligible for the transfer. Here are some features of a loan against property balance transfer:
- It remains to be a secured loan, and the borrower can mortgage either commercial property or a residential property
- The top-up you get is determined by the actual value of the property as well as any debt obligations of the borrower
- There are hidden and processing charges associated with the transfer that the borrower will have to pay
The documentation and eligibility criteria remain the same for loan transfer.