I took Home Loan from HDFC and Top up loan (For that Home loan). I closed the Main Home loan. Can I do balance transfer to other Lender for the Top up Loan (Only Top up Loan which is not Mortgage)? 

Ans: Yes, converting your Loan Against Property (LAP) back to a Home Loan is possible, but it depends on your bank’s policies. Here’s what you need to consider:

Key Differences Between LAP and Home Loan
Interest Rate: LAP usually has a higher interest rate (10-14%) compared to a home loan (8-9%). Converting to a home loan may reduce your interest burden.

Loan Tenure: Home loans offer longer tenures (up to 30 years), whereas LAP has shorter tenures (up to 15 years).

Tax Benefits: Home loans offer tax benefits under Section 80C and 24(b), but LAP does not.

Purpose: Home loans are meant for property purchase/construction, while LAP is for general financing needs.

Conversion Feasibility
Bank Approval: Karnataka Bank must agree to convert your LAP back to a home loan. Banks usually allow this if the original purpose was home-related.

Property Usage: If the LAP was taken for personal needs (not business), banks may consider converting it.

Documentation: You will need to submit fresh home loan documents, including income proof and property papers.

Alternative Options
Home Loan Balance Transfer: If Karnataka Bank does not allow conversion, transfer your LAP to another bank as a home loan for a lower interest rate.

Prepayment Strategy: If your financial condition has improved, consider prepaying the LAP instead of converting.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment