Are you unhappy with the services of your current lender? Did you avail of a home loan and are not able to repay it? Are you thinking of refinancing the loan for a better deal? Then worry not! We have got it all covered. Punjab National Bank is one of the most popular public sector banks in India. This nationalized bank offers various financial services to its customers. It has several products and services to its credit. Once specific service which popularizes the Punjab National Bank is the home loan. Here’s your chance to transfer the home loan to this bank and enjoy the benefits it has to offer. In this article we will read about PNB Home Loan balance Transfer.
This article aims to enlighten the readers regarding the features and benefits of the home loan balance transfer. After reading this article, the readers will successfully be able to know various details about the procedure, the eligibility criteria, the advantages of availing a home loan from PNB, the documentation involved in the transfer application, the fees charged by the bank, and answers to some frequently asked questions.
Home Loan Balance Transfer
This service is available for the benefit of the debtors who cannot clear their existing loans. As per the procedure, the principal amount to be repaid from the current loan is transferred to another bank or financial company. The new bank charges a low interest as compared to the rate the previous bank offered. In this way, the total cost involved in the repayment of the loan is reduced.
Thus, the debtors struggling with the repayment of loans can now avail of this facility to reduce the debt burden. Another way to avail of a low-interest rate for the existing home loan is by negotiating with the current lender. But before availing a home loan, the debtor should be aware of the current interest rates. He should keep a constant track of the interest rates offered by various financial institutions and borrow from the lender providing the best deal.
Why Should Borrowers Choose The Punjab National Bank?
If any of the masses intend to purchase a new house by making a huge investment, then Punjab National Bank is the best financial institution to avail of this loan. This bank offers the following advantage to every borrower availing a loan through them:
- The interest rate for home loan starts at 8.60%.
- There are no hidden charges involved.
- It simplifies the documentation and the processing of the loan.
- The processing and pre-closure charges are nominal.
- They offer an overdraft facility to the limit of Rs.25 lakh apart from the housing loan, which can be used for the borrowers’ personal purpose. If the loan is availed for the purchase of a house, then the loan-to-value should not exceed 80% on both the housing loan and the overdraft combined. If the loan is availed for the purchase of a flat, then the loan-to-value should not exceed 75%.
- The maximum period for the repayment of the term loan is 30 years. However, the overdraft facility has to be renewed every year.
Salient Features Of The PNB Home Loan Balance Transfer
Some of the features the make the PNB home loan balance transfer unique are:
i. The rate of interest in the home loan offered by the PNB starts at 8.60% per annum.
ii. The maximum tenure for the repayment of the loan is 30 years.
iii. The processing fees charged by the bank are 0.35% of the total loan amount availed by the borrower. The minimum value stands at Rs.2,500, and the maximum value does not exceed Rs.15,000.
iv. The margin of these loans is fixed between 20% to 25%.
v. The collateral security is crucial for the bank. Thus, the property for which the home loan is availed is mortgaged.
Advantages Of Availing A PNB Home Loan Balance Transfer
The borrowers who avail a PNB home loan balance transfer are entitled to the following benefits:
i. The pre-closure and the part payment of the loan are neither entitled to any penalties nor any charges.
ii. There are no hidden charges involved in this balance transfer.
iii. The loan is quickly processed, and the documentation is user-friendly.
iv. Services are also provided at home on request.
v. The interest rate can be fixed but with a competitive rate.
vi. There is no need for a guarantor in the case of these loans.
Eligibility Criteria Of Punjab National Bank PNB Home Loan Balance Transfer
To avail the Punjab National Bank PNB home loan balance transfer, the applicants should fulfill the following criteria:
i. The applicant should be an Indian resident or a non-resident of India.
ii. The age of the applicant should be between 21years to 65 years.
iii. The applicant should have a minimum work experience of 2 years in the current employment criteria if he is a salaried individual.
iv. The applicant should have a minimum work experience of 5 years in the current business if he is a self-employed businessman.
v. The applicant should have a minimum monthly income of Rs.25,000.
vi. A joint application is also permitted. The co-applicant should have a stable income. He/ She can be the spouse, children, or the parents of the applicant. The income of both the applicants is considered for sanctioning the loan.
Documentation For The Application Of PNB Home Loan Balance Transfer
Given below is the list of documents needed for the application of the PNB home loan balance transfer:
a. A duly filled application form for the home loan balance transfer.
b. Proof of Address: documents like Aadhar card, Voter’s ID, Driving license, or Passport could be submitted.
c. Proof of Identity: this involves photo identification documents like Aadhar card, PAN card, Passport, Driving License, or Voter’s ID.
d. Income proof for salaried individuals involves the submission of the latest salary slips and Form 16.
e. Income proof for self-employed individuals and businessmen involves the submission of IT returns of 3 years and financial reports like balance sheets and the profit and loss statements.
f. The Bank Account Statement of the past 6 months should also be necessarily submitted.
g. If the applicant already has a loan other than a home loan, then he has to submit the pass sheet of the loan amount to be provided.
h. A No Objection Certificate (NOC) has to be procured from the current lender.
i. The passport size photos of the applicants should be self-attested on the application form.
j. The applicant has to submit the copies of the property documents for which the loan is being availed.
Fees charged on the PNB Home Loan Balance Transfer.
Procedure To Avail The PNB Home Loan Balance Transfer
As per the guidelines laid down by the Punjab National Bank, the procedure to avail of the home loan balance transfer is as follows:
a. First, the current lender has to be informed about the loan closure. Thus, the borrower will have to send a closure request to the lender stating the reasons for its closure. The request can be made in the form of a letter. If the institution has a pre-closure form, then it will have to be duly filled by the borrower.
b. If the lender approves of the pre-closure of the loan, then he has to issue a No-Objection Certificate. This is one of the important documents that must be submitted to the new lender and the other documents.
c. With the approval of the old lender for the pre-closure, now the applicant has to apply for a home loan balance transfer from a new lender. To proceed with the application of the home loan balance transfer, the applicant has to submit relevant documents. This includes the application form and the proof of address, income proof, photo identity proof, bank account statements, NOC from the previous lender, photographs, and the principal balance in the current bank account.
d. After the submission of all the documents, the lender will assess the applicant based on eligibility and other norms.
e. Then after a while, the existing lender will confirm the closure of the account.
f. Henceforth, the new lender will take care of all the processing and appraisal work.
g. Now, the outstanding balance will be taken over by the new lender. The payment of the equated monthly installment (EMI) towards the loan will be paid to the new lender.
Tips For Availing The Best Interest Rates For The PNB Home Loan Balance Transfer
Some of the factors taken into consideration to avail the PNB home loan balance transfer with the best interest rates are as follows:
i. The Type Of Loan:
Fixed rates and floating-point rates are the two categories of interest rates. Individuals can choose either of the two according to their convenience. But the fixed rate is highly preferred. As the floating-point rate varies from time to time, it can either be a low-interest rate favoring the applicants or a high rate, making it cumbersome for the applicants.
ii. Credit Score And The Applicants’ Financial Stability:
Before the approval of the home loan balance transfer, the interest rate is assigned to the loan. This is based on the credit score of the borrower. The applicants having a high credit score will get low-interest rates for the loans.
Applicants should compare the various fees of different lenders before availing the loans.
Factors Determining The Interest Rates Of Home Loans Balance Transfer
Here’s a list of various factors that increase or decrease the interest rate on the PNB home loan balance transfers.
The monthly income is the most important factor that determines the interest rate on any loan. If an individual has a good job with a high salary, then the banks are lenient to such customers, thereby offering loans at a low-interest rate.
b. Type Of Interest Rate:
The customer decides whether he wants the interest rate to be fixed or vary from time to time. As per his decision, the monthly EMIs may remain constant for the entire duration of the loan’s repayment or fluctuate every month.
c. Credit Score:
A good credit score helps the applicants to avail of a loan at nominal interest rates. But a poor interest rate would attract a higher interest rate.
d. Loan Amount:
The interest rates vary for the different loan amounts. Generally, the loans above Rs.30 lakh have a high-interest rate.
e. Type Of Employment:
Salaried individuals are charged a lower interest rate in comparison to the rate charged on the self-employed individuals.
There are special discounted rates for women borrowers. This ensures that women attain financial independence. Thus, the male applicant can add a woman as his joint applicant to avail of low-interest rates.
g. Tenure Of The Loan:
A loan with long tenure has a lower interest rate.
Why Should Borrowers Go For The Home Loan Balance Transfer?
There are various reasons an individual would opt to transfer the home loan.
- To reduce the interest rate on the current home loan.
- To decrease monthly EMI with the tenure as mentioned or to shorten the tenure with the EMI remaining the same.
- To decrease the total cost of the loan charged on the applicant.
However, the applicants should also take into consideration the various fees involved in this transfer. If the interest rate and the new lender’s additional charges are less than that offered by the current lender, they should only avail of the home loan balance transfer. The transfer can be availed 12-18 months after the applicant has successfully paid his loan with the existing housing loan.
Who Should Apply For The Home Loan Balance Transfer?
Often, a borrower may feel that he is paying more interest or the tenure of the current bank loan is not flexible. This is in comparison to what is available to the market. If the borrower faces any of these problems with his current lander, he can consider a home loan balance transfer to another lender who can satisfy the borrower. This can enable the borrower to avail of the best deal to reduce the financial burden on him.
Here are some factors that every borrower should consider before going for a home loan balance transfer:
i. If the home loan’s maturity date is approaching soon, it is highly recommended to go for a balance transfer. Or else, of the tenure is long enough, then the borrowers should think of transferring the home loan balance.
ii. If a huge chunk of the loan is yet to be repaid, the borrowers should consider a home loan balance transfer. Here the borrowers should give a thorough check on the interest rates offered by different financial companies.
If the difference between the current interest rate and the new loan is more than 25 basis points, then it is worth going for a home loan balance transfer. Whereas if the 70% of the loan has been paid off and the difference between the two’s interest rates is between 5 to 25 basis points, then the borrowers should stick to the current lender.
iii. Apart from comparing the interest rates of home loans offered by various financial institutions, the borrowers should all check the overall charges that will be charged during the entire tenure. This includes foreclosure charges, processing charges, and the savings that will be generated concerning the interest rate charged by the lender to deduce the actual benefit from the entire home loan.
iv. The borrower should also look into the details of the top-up loan that will be provided along with the home loan balance transfer. The top-up loans are extremely helpful as they can clear the high-cost loans that may have been availed by the borrower.
Punjab National Bank Home Loan
PNB home loans can be availed by any Indian resident. These loans are offered at an interest rate starting at 7.15% per annum. A minimum of Rs.10 lakh can be avail by the borrowers. The maximum limit of borrowing is set at Rs.1 crore. The repayment of these loans is extended over a tenure of 30 years. Apart from long tenure and low-interest rate, this bank also offers concession of 0.05% for women borrowers. This housing loan scheme aims to fulfill every customers’ needs. They do not charge prepayment charges for floating-rate loans. This bank also offers multiple repayment options to fulfill the customers’ needs.
The fixed interest rate for loans with a different amount.
Floating interest rate for individuals with different credit scores.
Fees Charged By The PNB
PNB Home Loan Eligibility Criteria
The applicants intending to apply for a home loan from the Punjab National Bank should satisfy the following conditions.
i. The applicant should be a resident of India.
ii. He/She should be either a salaried or a self-employed professional.
iii. He/She should have a good source of income.
iv. The applicant should be a minimum of 21 years of age to apply for this loan. This criterion is for both the salaried and the self-employed individuals.
v. The maximum age limit of the applicant for this loan is not more than 60 years in the case of salaried individuals. For self-employed individuals, the maximum age limit is 65 years.
vi. The applicant should have a credit score of 750 and above.
Documentation Required For Salaried Individuals
i. The duly filled application form.
ii. 2 passport size photos for the application form.
iii. Proof of identity: This can be verified by Passport, Driving License, Aadhar card, Voter’s ID, or PAN card.
iv. Proof of address: This can be verified by Aadhar card, Passport, Voter’s ID, or any other official document that proves the applicant’s address.
v. Income statement: Salary pay slip of the past 6 months, bank statement of the past 6 months that specifies the salary credited to the account, or form 16 can be submitted.
vi. Income proof of the co-applicant in case of a joint home loan.
vii. Documents of the property owned by the applicant also have to be submitted.
Documentation Required For Self-Employed Individuals
i. The duly filled application form.
ii. 2 passport size photos for the application form.
iii. Proof of identity such as Aadhar card, PAN card, Voter’s ID, Passport, Driving License.
iv. Proof of address such as Aadhar Card, Driving License, Passport, PAN card, Voter’s ID.
v. Proof of business like service tax registration, profit and loss account, balance sheet certified by the CA, proof of business existence, business profile, etc.
vi. Income proof of the co-applicant in case of a joint home loan.
vii. Property documents.
EMI Calculation Of PNB Home Loan
The PNB home loans have a long tenure. If the repayment of the home loan is not managed properly, then this can cause a lot of financial stress to the borrower. Thus, every borrower can prevent this situation by using an EMI calculator. Several online calculators can help the borrowers plan their budget and ensure the loan’s repayment regularly. These calculators are highly accurate and feasible to use.
The amount of monthly EMIs to be paid depends on the interest rate, loan amount, and loan tenure.
Keeping the interest rate constant at 7.00%, the table below demonstrates the change in the amount of EMI for the different loan amounts and different tenure.
As shown from the table, the amount of EMI increases with the increase in the loan amount. Also, the same EMIs decrease with the increase in the duration of repayment. The increase in the loan tenure, no doubt, decreases the monthly EMI, but the overall interest rate paid over the entire duration will also be more.
Step-By-Step Procedure To Avail Of The PNB Home Loan
This procedure is simple and can be completed online.
i. The application form should be filled online. This is done on the official portal of the any of the branches of the Punjab National Bank. The application form should contain details like the loan amount, property details, personal information, professional details, contact address, and number.
ii. After submitting the application form, the bank agents will call the applicants to justify the applicant’s eligibility. If eligible, then a further discussion about loan returns, terms, conditions, fees charges, etc. will occur.
iii. Once the application proceeds forward, the applicant will have to submit property and income documents. These documents can be submitted either online or to the bank agents who will collect these from the applicant’s residence.
iv. The next step is the payment of the processing fees. During this time, the bank will check the credit score and evaluate the property.
v. After a thorough examination by the bank, when the applicant is eligible, he will receive a sanction letter from the bank. The applicant will have to sign a loan agreement with the bank. Then the entire loan amount will be disbursed to the applicant’s account.
Home Loan Schemes Offered By The Punjab National Bank(PNB)
There are various customized schemes offered by this bank to its customers. These are designed to meet the loan requirement of every customer. Some of the products offered by the PNB are as follows.
1. Repo Rate Linked Home Loan:
This loan can be availed by individuals who want to purchase a housing property. This home loan scheme is available for the new borrowers as well as existing borrowers. The current home loan borrowers can also choose to transfer their home loan under this scheme.
As per this scheme, the interest rate should be necessarily linked with the repo rate. This is mandatory for the bank, according to the RBI guidelines. The maximum tenure of the loan is 30 years. The amount sanctioned to the applicants ranges between Rs.10 lakh to 1 crore.
i. The individuals can either be salaried or self-employed. They should have a monthly income of a minimum of Rs.25,000.
ii. The minimum age of the applicant should be more than 18 years.
iii. The maximum age limit of the applicant should be less than 60 years.
2. Pradhan Mantri Awas Yojana (PMAY):
This is a government initiative which aims to provide affordable housing facilities. This scheme can be availed by lower and middle-income groups. It includes several other schemes as follows.
a. Pradhan Mantri Awas Yojana or Home Loan Subsidy Scheme-
The PNB offers this scheme to the homeless. Launched in the year 2015, this scheme can be availed by only those who fulfill the eligibility criteria.
b. Pradhan Mantri Gramin Awas Yojana-
As per this scheme, pucca houses were provided to every homeless family with basic amenities.
c. DDA Housing Scheme-
Houses are provided to the low, middle, and high-income groups.
d. Tamil Nadu Housing Board Scheme-
This scheme also aims to provide houses to individuals form different income groups.
e. Mahada Lottery Scheme-
Buyers of various income groups can avail of this lottery scheme.
f. Rajiv Awas Yojana-
This scheme legalizes illegal constructions. It aims to develop the slum areas, thereby creating a slum-free nation. It was launched in the year 2009.
3. PNB Home Loan For Public:
This loan can be availed by the general public. Construction of houses, purchasing of a new house, renovation of the existing house, and the purchase of a residential plot are some of the reasons this loan can be availed for.
4. PNB Max Saver:
This loan is availed in the form of an overdraft. It enhances the customers’ savings on the home loan interest. As per this scheme, the borrowers transfer the lump-sum amount in the overdraft. This amount can later be withdrawn by the borrower according to his needs. Customers who wish to purchase a new house or flat can avail of this scheme. But it cannot be availed for the purchase of plots and constructional land.
5. PNB Pride Housing Loan:
This loan is especially designed for the individuals from the defense sector. The Central and State Government employees, defense personnel, and Para Military Forces are some of them to name a few. The applicants can apply for this loan either individually or as joint co-applicants.
6. PNB Gen-Next Housing Finance Scheme:
This loan can be availed by salaried class borrowers and other government employees. Term insurance of the amount equal to the loan to be availed has to be obtained by every borrower.
- The government employers should have a working experience of a minimum of 3 years.
- In the case of a joint application, co-applicants should also be salaried individuals.
- The applicants should be at least 40 years of age.
- The minimum monthly salary should be not less than Rs.35,000.
Related Frequently Asked Questions
1. How does the bank decide the amount of the loan?
The amount of the loan is based on the value of the property and the monthly income of the applicant. Normally, the amount of loan sanctioned by the bank is 80% of the value of the property.
2. If an applicant chooses the floating rate of interest then will the monthly EMI change?
Yes, as per the floating interest rate the rate of interest fluctuates every month. This means that as the interest rate changes the monthly EMI to be paid will also change with the rate of interest every month.
3. The pre-payment of the PNB home loan balance transfer is charged?
No, neither the pre-payment nor the part-payment of the home loan balance transfer is charged.
4. How will the borrowers get the Interest Certificate for the PNB home loan balance transfer?
This certificate will be posted to the borrower every year via mail address or the borrowers can personally collect it from the nearest PNB branch.
5. When should the applicant consider home loan transfer?
Transferring the home loan from one bank to another makes sense only when:
i. The current loan has an interest rate higher than that offered by most other banks.
ii. The loan has a floating rate of interest and if the applicant wishes to change that by going for a fixed interest rate.
iii. The applicant wishes to enhance his saving by reducing the monthly EMIs..
6. When should the borrower not transfer his home loan?
The borrowers are advised not to transfer the home loan if:
i. He has been repaying the loan for a long time.
ii. There is a penalty for the prepayment of the loan by the current bank.
iii. The borrower intends to move out of the property.
7. Is the borrower allowed to transfer more than the pending amount from his loan?
No, the borrower are not allowed to transfer more than the pending amount from the loan.
8. If the credit score of the applicant has dropped since the last availed a loan, then will this affect the transfer of home loan?
Yes, this will affect the transfer of the home loan. When the applicant applies for the transfer of a home loan at a new lender, the procedure for the application involves fulfilling the eligibility criteria and a good credit score.
Thus, there is a high chance that the current credit score of the applicant will impinge on the transfer of the home loan.
9. What is the time duration for the transfer of the home loan?
On average 15-20 days are required to transfer the loan from one bank to another.
10. Will the new bank consider the assessment of the eligibility undertaken by the previous bank?
No, when an applicant applies to another bank for the transfer of the home loan then the new bank will also follow the same evaluation procedure undertaken by the previous bank.
11. Is co-application for the home loan balance transfer permitted?
Yes, co-application of the home loan with any earning member of the family is allowed. This also increases the chances of availing a better interest rate.
12. Are there tax benefits on the home loan availed from the PNB?
Yes, according to the Income Tax Act, 1961, every applicant is entitled to tax deductions and exemption. Under section 24(b) deductions can be claimed on the interest rate. Under section 80C deductions can be claimed on the principal amount of the loan.
13. Will the rate of interest of a housing loan by the PNB change in the future?
Yes. If the applicants convert the fixed rate of interest into a floating rate of interest, then the bank charges a fee of 2% from the outstanding loan amount and the applicable tax. if the interest rate is converted from the floating rate to the fixed rate then 0.5% of the outstanding loan amount and the applicable tax is charged on the applicants.
14. How to increase the eligibility to avail of a PNB home loan?
The applicant can increase his eligibility by adding another co-applicant. This will increase the monthly income as two earning members will now be contributing to the same loan. Thereby, giving the applicant an advantage for availing of home loans with a huge amount.
15. Does the PNB require security to sanction the home loan to the applicants?
Yes, the bank charges the security in the form of a mortgage of the property to be financed.
The home loan balance transfer is a second opportunity for every individual who is not satisfied with the present lender’s terms and conditions. This includes the high-interest rate charged by the current lender, the loan tenure is not flexible, or there are many issues concerning the services offered by the current lender. Such a transfer helps the borrower to rectify his previous mistakes by availing of a home loan with better avenues. This not only enhances the savings of the applicant but also proves to be highly efficient in the long run.
With the interest rate starting at 8.60%, the Punjab National Bank offers a great deal to the applicants. It is famous for various reasons. Besides the nominal interest rate, the applicants can avail of great benefits by transferring their home loan to this bank. There are no hidden charges involved in the application to this loan. The pre-closure and part payment are free of charges. If any individual is planning to make a huge investment towards buying a house by availing of a home loan, then Punjab National Bank would be ideal and it is good among PNB Home Loan Balance Transfer.