Can a Home Loan Be Transferred to Another Person? Expert Guide 2025
Learn more about how a home loan can be transferred to another person by cutting down your monthly EMI’s and get better loan terms which could save you significant money overtime.
Can a Home Loan Be Transferred to Another Person? Expert Guide 2025
Looking to cut down your monthly EMIs and get better loan terms? A home loan transfer, also called a balance transfer, lets you change your outstanding home loan between lenders. This move could save you significant money over time.
Many people ask if they can transfer their home loan to someone else. The process needs careful thought. The new borrower must pass specific eligibility checks. These include having a good credit score, steady income, and the ability to handle repayments. On top of that, it takes a few weeks to complete. The new lender will verify documents and assess creditworthiness.
This piece has everything you need to know about moving a home loan between people. You’ll find details about who qualifies, the steps involved, and what it all means for your wallet. We’ll help you decide if this financial move makes sense for you and guide you through the next steps.
What is a home loan transfer?
Home loan transfers are vital to understand if you plan to switch lenders or pass your loan to someone else. A home loan transfer lets you move an existing home loan between different entities – either between financial institutions or from one person to another.
Can a home loan be transferred to another person? The answer is yes, but you need to meet specific conditions. The new person becomes responsible for repaying the remaining loan balance with the same terms and conditions. The monthly payment, loan length, and interest rate stay the same after the mortgage moves to the new borrower.
Home loan transfers come in two main types:
- Balance Transfer (Institution to Institution): This process is also called refinancing. You move your existing home loan to another bank that gives you better terms. Your new bank pays off what you owe to your current lender, and you start fresh with better interest rates or improved loan conditions.
- Person to Person Transfer (Assumable Mortgage): Someone else takes over your mortgage payments and legal duties. This removes the original borrower’s legal responsibilities from the loan.
You might want to transfer your home loan from one person to another in these cases:
- You want to gift or sell property to a family member
- You’re going through a divorce or separation
- A joint owner or family member has passed away
- Your loan has great terms that could help sell the property
Eligibility Requirements for Home Loan Transfers
Getting a home loan transfer requires meeting specific eligibility criteria set by lending institutions. Your application’s success depends on how well you match the parameters that banks and housing finance companies have defined.
Want to know if a home loan can be transferred to another person? Let’s find out what eligibility requirements you need to meet before starting this financial move.
| Eligibility Criteria | Details |
| Age | 18 to 65 years (varies by lender) |
| Employment Status | Salaried, self-employed, business owners, or pensioners |
| Income Level | Minimum monthly income as defined by the lender (based on the applicant’s repayment capacity) |
| Credit Score | Minimum credit score of 650 or as specified by the lender |
| Existing Loan Status | Current loan should not have overdue payments or defaults |
| Property Type | Must be residential and must meet lender’s valuation requirements |
| Loan-to-Value Ratio (LTV) | LTV ratio should generally be within the lender’s prescribed limits (typically 75%-90%) |
| Work Experience | Minimum work experience (usually 2 years for salaried, 3 years for self-employed) |
| Property Location | The property must be located in an area where the lender provides home loans |
| Existing Loan Repayment | Existing loan must be in the repayment stage with no major delinquencies |
| Transfer Process Fees | Applicants may need to bear the costs of processing and other related charges. |
Documentation Requirements
A home loan transfer from one person to another needs detailed documentation. The new borrower must provide:
- Identity proof (passport, voter ID, Aadhaar card)
- Income verification (salary slips, bank statements, Form-16)
- Property-related documents
- No Objection Certificate (NOC) from the current lender
Lenders also review minimum loan amount, credit score, and loan-to-value ratio before approving transfers. Note that approval stays at the lender’s discretion and they review each case individually.
Step-by-Step Process to Transfer Home Loan from One Person to Another
Transferring your home loan from one person to another needs a well-laid-out process that ensures loan obligations transition smoothly. The steps vary slightly depending on whether you transfer to a family member or sell your property with an assumable mortgage.
Research and Choose a New Lender
You should compare potential lenders based on their interest rates, loan terms, and customer service reviews before starting any transfer. Most borrowers choose balance transfers to get lower interest rates and reduce their EMI burden. The transfer process can begin once you find the right lender.
Notify Current Lender and Get Essential Documents
A formal letter to your existing lender requesting a balance transfer starts the process officially. Your current lender will then issue:
- No Objection Certificate (NOC) or consent letter
- Foreclosure letter
- List of property documents (LOD)
- Loan statement showing your EMI payment history
These documents help transfer your home loan to another person as they contain your outstanding loan amount and property details.
Submit Application to New Lender
The next step involves applying to the new lender through their website or branch office after collecting all documents. This includes:
- Reading their terms and conditions carefully
- Completing the loan transfer application form
- Providing details about your existing loan, lender, and property
- Paying the applicable processing fees
- Submitting essential documents, including income proof, ID verification, and property papers
Lenders need to verify the new borrower’s credit to assess their financial capacity for loan repayments.
Loan Closure and New Agreement
The new lender pays off your outstanding loan amount to the previous bank after approval. Your old account closes permanently, and all property documents move to the new lender. The borrower signs a fresh loan agreement that states the interest rate, repayment tenure, and outstanding loan amount.
Note that mortgage transfers usually take two to four months to complete, so plan ahead when transferring your home loan to another person.
Benefits of Home Loan Transfer
Here are the key benefits of home loan transfer in a pointer format:
Lower interest rates:
- Opportunity to switch to a lender offering a lower interest rate
- Potential for significant savings over the loan tenure
Reduced EMI:
- Lower interest rates often result in reduced monthly payments
- Improves cash flow and financial flexibility
Longer repayment tenure:
- Option to extend the loan tenure for more manageable EMIs
- Helpful for those facing temporary financial constraints
Better features and services:
- Access to improved loan features from the new lender
- Potentially better customer service and digital banking options
Consolidation of multiple loans:
- Opportunity to combine multiple home loans into a single loan
- Simplifies repayment process and potentially reduces overall interest
Top-up loan facility:
- Some lenders offer additional funds as a top-up loan during transfer
- Useful for home improvements or other financial needs.
Improved credit score:
- Regular payments on the new loan can positively impact credit score
- Better terms may make it easier to maintain a good payment history
Flexibility in loan terms:
- Chance to negotiate better terms with the new lender
- May include options like partial prepayment without penalties
Escape from poor service:
- Opportunity to switch from a lender with unsatisfactory service
- Choose a lender with a better reputation and customer support
Potential for better property valuation:
- New lenders may offer a higher property valuation
- This could result in a larger loan amount if needed
Conclusion
Home loan transfers offer opportunities for better financial management, potentially leading to lower interest rates or improved loan terms. While the process requires careful consideration and documentation, it can be particularly beneficial for those facing financial challenges. Proper preparation, including document readiness and maintaining a good credit score, is crucial for a successful transfer, which typically takes 2-4 months but can significantly enhance one’s financial situation.
