Insurance provides protection against risks that may damage any of your possession, be it property, house or vehicle. Car insurance is a type of motor insurance policy which helps the policyholder manage financial losses associated with various risks, such as car accident, theft or loss of the car.
What is Car Insurance?
Car insurance, which comes under vehicle insurance policy, is mandatory in India under the Motor Vehicles Act, 1988. It provides financial support to the car owner to manage situations like repair costs due to accident, theft or loss of the car. This insurance plan includes a compulsory third party coverage to manage any injury or damage to another person, vehicle or property caused by the insured car.
Types of Car Insurance
A car insurance can be divided into 4 broad categories. They are:
Comprehensive Policy: It is an all-inclusive plan which provides end-to-end coverage for all the risks related to the car, first party, co-passengers and third party. It also provides coverage against all natural disasters or human-made catastrophes, including earthquakes, landslides, floods, strikes and riots.
Co-passenger Protection Coverage: Some insurance providers offer personal accident coverage for co-passengers, though this can be availed by paying an additional premium. In case of the death of the passenger or the one who is driving, you can get 100% compensation for it. If there is any type of permanent disability from any injury, a 100% compensation can be claimed.
Third Party Liability Insurance: Law in India mandates the purchase of this policy for everyone. It provides coverage against liabilities arising from any harm caused to third-party and property by the insured car.
Personal Risk Coverage: A policy usually provides coverage only for the owner of the car. However, instead of the driver, any other person in possession of a valid license can also be covered by purchasing personal injury coverage rider.
What all it Covers?
The coverage provided by car insurance usually varies from provider to provider. However, some situations and cases are covered by almost all of them. Let us look at some of the points:
How Car Insurance Functions?
It makes sense to understand how a car insurance functions. This will help in planning better for the coverage that you need as per your requirement.
It is compulsory for all types of car, old or new, to get a car insurance, along with a third-party insurance coverage. To be eligible to get this insurance, a person should be 18 years and above, a citizen of India, should possess a driving license and should possess the RC of the car.
In case of any eventuality, you need to make a claim with the insurance company to get the compensation for the financial loss. It makes sense to understand the steps to go ahead with the claim process.
Documents Required For Claim Process
In case of accident or damage done to you, car or to the third party, intimation to the insurance company is important. Along with that, following are the essential documents which need to be submitted for timely claim:
Time Taken to Settle Claims
Car insurance companies have two options to settle the claim; one is through cashless where the claim is settled directly by the insurance company, if the insured gets the vehicle repaired at the network garage. The other is reimbursement claim, where the insured pays the bill and the insurance company later reimburses the amount.
Apart from the standard coverage provided by the provider, you can also opt for additional benefits, called add-ons, by paying an extra amount. These advantages vary for every provider. Some of the add-ons are:
A car insurance provides mental peace and relaxation after buying a car; however, the insurance does not cover all types of cases. Some situations not covered, also called exclusions, are:
One can renew his or her policy through online mode after the required inspection either by you or by a surveyor; following are the steps:
Companies Offering Car Insurance in India
Almost every other insurance company provides motor insurance in India. Some of insurance companies providing car insurance in India are:
Low premium costs are usually the sole deciding factor while choosing a car insurance product and this could also mean not having an adequate protection cover. You should consider other important points as well before buying a policy.
Home Loan Balance Transfer helps you reduce your EMIs by moving your outstanding loan from other financial institutes to the one which offers lower interest rate.
Home Loan Balance Transfer or Refinancing or simply Balance Transfer is the process that allows you to benefit from the lower interest rate offered by the other lender. If you have an existing outstanding home loan with one borrower, you can make a home loan transfer, that is, shift the remainder amount to a different borrower who charges a lower rate of interest, the process is termed as a home loan balance transfer or refinancing. This unique home loan transfer service helps a customer avoid high applicable interest rates as listed by one home loan lender and migrate to a lower interest rate structure with another lender.
So why one would need a balance transfer? A home loan involves a significantly large amount of money and therefore, the interest rate on the loan is a matter of concern for everyone who decides to take a home loan. Home loan interest rates may be high so one of the most common ways to reduce interest rates is to either talk to the bank that has provided you with the loan to reduce it or go for a transfer of the balance on an existing home loan or in layman terms, shift your home loan to a bank offering lesser rate.
Key Features of Home Loan Balance Transfer
The most important benefit of availing a home loan balance transfer is saving money. The difference in interest rates between the two lenders, the tenure of the loan and the amount outstanding are the three primary contributing factors. If you see a significant benefit in the home loan interest rate, it may well be worth considering a switch to the new home loan lender. You must first and foremost identify the objective for availing of a balance transfer of your loan. Then you must just ensure that your new home loan helps you bring down your overall cost of acquisition. The reason of switching the lender could include:
Any salaried, self-employed professional or self-employed businessperson with an outstanding home loan that has been regularly serviced can apply for a home loan balance transfer. Though all loan providers have different eligibility criteria, some basic ones are as follows:
Your home loan balance transfer is treated similar to a fresh home loan application by the bank you are transferring the loan to. Therefore, while applying for your home loan to transfer to another bank, all the documents provided during the initial home loan application need to be resubmitted. These documents are then revalidated and vetted by the bank or NBFC providing the loan transfer facility. Documents are the most important element while taking up a loan because they best help the bank to identify the loan borrower to make sure of their loan borrowing and loan repayment capabilities. The prerequisite key documents for home loan transfers are the following:
Home Loan Balance Transfer Rates of Top Lenders
Lowest Balance Transfer Rates
Processing Fee (Exclusive of GST)
Kotak Mahindra Bank
Up to 0.50% of the loan amount plus statutory dues
LIC Housing Finance Ltd.
Processing fee of 0.50% of the loan amount plus applicable taxes.
State Bank of India
Up to 0.4% of the loan amount (Min. of Rs 10,000 & Max. of Rs. 30,000)
Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higher
Bank of Baroda
Flat: Rs 8,500/- (upfront)
Union Bank of India
0.50% of the loan amount (maximum Rs.15,000)
Up to 1% of the loan amount subject to a minimum of Rs. 10,000
0.50% (Min. Rs. 1,500; Max. Rs. 10,000)
IDFC First Bank
Up to ₹10,000
0.50% of loan amount (Min. Rs. 10,000; Max. Rs. 45,000)
L&T Housing Finance
0.25% of the loan amount
Standard Chartered Bank
Up to 1% of the sanctioned amount
Up to 2% of the loan amount
Indiabulls Housing Finance Ltd.
Up to 2% of the loan amount
Up to 2% of the loan amount or Rs. 10,000, whichever is higher
Piramal Capital & Housing Finance
Up to 3% of the loan amount
Home Loan Balance Transfer Interest Rates as of 5th October 2021.
The housing loan balance transfer rates in the table are subject to change anytime without prior notice
Guiding Steps to Home loan Balance Transfer:
Due to unalike interest rates offered by different banks and loan lenders for existing and new customers, several customers get upset with their high home loan interest rates. This is the point when you can consider a switch between banks and transfer your home loan to a bank offering lower rates compared to the existing one. Here is a guide to get you in the clear about Home loan Balance Transfers-
Step 1: Analyze cost benefits being offered Decide the viability of transferring your home loan by analyzing the current situation. Here are some guidelines to help you with the analysis:
Step 2: Get NOC from the existing bank Getting a No Objection Certificate (NOC) from your current home loan provider is a key step in the home loan balance transfer process. The other document that is necessary to complete this step of the balance transfer system is a foreclosure letter along with the complete list of documents held by the bank as well as your payment history. In some cases, your current bank may try to retain your business by offering you a reduced interest compared to what you are currently paying. Make sure you analyse such an offer as well as other offers thoroughly before settling on a specific one.
Step 3: Apply To New Bank Now you must have all the required documents ready to transfer existing home loan to another bank of your choice. You will also require getting a No Objection Certificate from your housing society or builder to be submitted as a proof of ownership to the bank along with all other documents. Then, bank will check your ability to pay the monthly installments. While making the application for balance transfer, you can decide to top up the balance on your home loan, reduce tenure or change your home loan EMIs.
Step 4: Credit Approval At this step, bank will evaluate your application and decide your eligibility for home loan transfer. Extensive background checks and history assessment will be carried out before they give you a credit approval. These verifications include re-evaluation of your home loan, checking your credit history, checking the authenticity of ownership and document valuation. Once the issues related to Credit Approval are resolved, the home loan provider would provide you with documentation that mentions key information such as the new loan interest rate, tenure and other features. Once this step is completed it is time you decided whether to go through with the balance transfer to stick to your current loan provider.
Step 5: Documentation with Chosen Loan Provider At this point, if you decide to finalise the home loan transfer process, you would be required to complete the documentation process with your selected loan provider. They may require a few extra documents to complete the whole transfer process. Here, you have your home loan transferred at a low interest rate and better benefits.
Banks are very careful when allowing shifting your home loan, especially banks which take on the responsibility of the transferred loan amount. And that is where PaisaBazaar can help you.
Our Home Loan Balance Transfer Calculator can help speed up your decision-making process by sifting through all the offers available based on the information provided by you. Our online tool automatically generates a comprehensive comparison report based on your requirements to help you make an informed decision. Our calculator takes everything into consideration, such as your total and outstanding loan amounts, remaining loan tenure and the existing rate of interest on your home loan. We will also provide you with the fine print of the transfer agreement to aid your decision.
Q. When is a home loan balance transfer a good idea?
Ans. The key reason for transferring a home loan from one lender to another is to benefit from a lower interest rate provided by the new lender.
Q. Is there a limit to the amount I can transfer?
Ans. Yes. The maximum balance transfer amount is equal to the outstanding amount of the home loan.
Q. When should I not consider transferring my home loan?
Ans. You must not consider shifting your home loan if one of the following is applicable in your situation:
Q. Does my current credit score affect my chances of successfully completing the transfer?
Ans. In case your credit score has dropped significantly since you applied for the initial home loan, it might affect the process. As the balance transfer process works similar to applying for a new home loan, your credit score and history would play a key role in determining your eligibility for the home loan balance transfer.
Q. Will my refinance be affected by the prepayment penalty?
Ans. Most banks today wont have a prepayment penalty in the first place. But if your bank has it, then you can ask your new lending bank to take it into account. This will vary from bank to bank.
Q. How much time will it take to transfer my home loan from another bank?
Ans. Transferring a home loan is treated like buying a home loan all over again by the bank, the loan is transferred to. Therefore, it might take 15-20 days for the home loan to be transferred to the new bank.
Q. What is a top up loan?
Ans. For instance, if the property value of your home climbs much higher from its original price at the time you took the home loan and you might require more finance for your home renovation. In this situation you can add to your loan. This is called a loan top up.
Q. Can I get a top up on my loan along with the transfer?
Ans. Yes, depending upon your eligibility, the loan issuer can offer you the option to top up on the home loan to be transferred to the new bank but there may be processing and legal charges applicable.
Q. What processing fee is charged on home loan transfer?
Ans. Processing fees on transfer of home loans range from 0.5% to 1% of the loan amount.
Q. Is there any interest saving in EMI by home loan transfer to another bank?
Ans. The precise reduction in EMI varies based upon:
Q. What steps does a home loan takeover involve?
Ans. The simple steps following below are involved in transfer of your loan:
Q. What precautions must be taken when transferring a home loan?
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