Home Loan Transfer: Home loan transfer can be done not only to reduce EMI but also to revise the terms of repayment term, for better services and facilities, pre-approved offers.
Home Loan Transfer: If you have taken a home loan and feel that you are paying more EMI, then you can go for the transfer option. A reduction of even one percent in the interest rate can make a big difference, so in such a situation, if you are finding your EMI high, then you can transfer the home loan. Home loan transfer means that the bank from where you have taken the home loan will be transferred to any other bank/financial institution and then you will have to pay the EMI to the new bank. However, it is very important to take care of some things before adopting this option. Home loan transfers can be done not only to reduce EMI but also to revise repayment term terms, better services and facilities, pre-approved offers.
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Stepwise Process to Transfer Loan
- Compare both the banks/financial institutions before switching loans. In this, see the interest rates and the complete fee structure of the new loan.
- Negotiate the interest rates with the existing lender.
- Take a No Objection Certificate (NOC) and other necessary documents from the existing lender.
- Apply to the new lender with NOC and other necessary documents.
- Close the existing home loan.
- Pay the fee for getting a new home loan
- Now pay the EMI according to the new interest rate.
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Keep these things in mind before transfer
- Cost Analysis: Do consider the cost that will be involved in the process of loan transfer. You may have to pay some charges for premature closure of your loan. Apart from this, you will have to pay administration charges, processing fees and other charges. In such a situation, before transferring the loan, consider these charges and do a cost-benefit analysis that how much will actually benefit you from the transfer.
- Bargain: Banks/Financial Institutions want to keep their customers connected with themselves as the loss of a customer can affect their business. In this case, you can negotiate with your existing lender for a change in the interest rate. If you are successful in bargaining with the bank, then you will not need a loan transfer.
- Take a decision based on the remaining loan amount and tenure: Home loan transfer can be costly if you have repaid a large part of the loan and now have very little debt left. Generally, it is better to transfer a home loan only if it is not too old.
(Input: Kotak Mahindra Bank)