Skip to main content

Home Loan Transfer

 

Frustrated with the bank from which you have taken home loan? This is the case with many of us and home loan transfer is recommended to such individual's. Another term for home loan transfer is refinancing or balance transfer. It is basically transferring the outstanding loan amount (principal loan amount) from one bank to the other of your choice.

When is home loan transfer recommended?

There are many reasons when you should think about transferring a home loan as listed below:

  • One of the main reason why home loan transfer is recommended is when the banks continue to charge higher interest whereas other banks offer the loan at low interest rates. This results in loss to the borrower.\
  • If you think that existing loan tenure is too short then you can ask bank to increase the tenure length but on the other hand reduce the EMI. However if banks do not consider your case, then you can consider a transfer.
  • If you have made EMI payment on time then you can ask the bank to reduce the rate. However if banks deny this, then choose another bank.
  • Service issues with the bank.

But the loan transfer is a win and loss situation for both the banks but a win situation for the customer in the long run. New bank will benefit, since they are getting a new customer and on the other hand existing bank will lose a customer which eventually is loss making for them. However not everything is an easy process as there are many procedures and conditions involved with both the banks as follows:

  • Existing lender: They are most likely to delay issuing the no objection certificate (NOC) or consent letter which states the balance amount on the loan. Remember that getting all the home loan documents is not easy and you should be ready for multiple follow-ups. ECS cancellation and post dated cheques will also be cancelled.
  • New lender: Any credit application i.e. loan or credit card involves rigorous back ground check by the banks. Although getting a new customer especially for a home loan which is highly profit making for the bank, they do not take any risk in providing a loan to a risky person who can become non-performing asset for them. And in order to identify such applicants, banks will check your credit rating with CIBIL i.e. they will gather data for all the credit applications you have taken or have applied to evaluate whether you are credit worthy enough. In addition to this, banks will also check all the legal documents of the property amongst others. If your property is resale one, the more documentation would be demanded by the bank. Apart from these, banks will also consider age, annual income amongst other factors.

Even if you pass the above test, there are further important points you should be aware of and most important being the various charges such as:

  • Processing fees: It can be either a flat fee or 0.5% (ideally) of the loan amount.
  • Legal fee
  • Stamp duty: Ideally 0.1%
  • Valuation fee
  • Documentation fee

Points to consider before moving to another bank:

Nothing comes for free and this applies to home loan refinancing as well. Before you finally decide to move, negotiate with the existing bank. If your repayment history is clear they might accept your conditions in order to avoid losing a customer.

  • Interest rate should not be the only reason for balance transfer and if that is the only reason for the transfer, then do a savings calculation with new and old interest rate along with the above mentioned fees.
  • Also remember to read all the terms and conditions, hidden charges of the new and existing bank.
  • Check whether the interest rate offered is not for only a limited period.
  • If you were unhappy with the service of the existing bank then check whether similar issue exists with the new bank or not. Make use of social media page of the bank.
  • If existing bank, agrees to reduce the interest rate then verify whether it is at no extra cost. And also whether the interest rate is for the full loan tenure and not short term.

Almost every Indian bank offers this facility so go for it and save money.

Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016 or Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

Popular posts from this blog

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
Read more

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...
Read more

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...
Read more

SBI Small Cap Fund

SBI Small Cap Fund scheme seeks to provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well diversified basket of equity stocks of small cap companies. SBI Small Cap Fund has widened its margin of outperformance relative to its category and benchmark in the last one year, earning itself a five-star rating. The fund shows a hefty 18 percentage-point outperformance relative to its peers in the last one year, 5 percentage points over three years and 4 percentage points over five years. Needless to say, it has also outpaced its benchmark to deliver convincing five-year annualised returns of 37 per cent. A believer in the credo that a small market cap does not reflect business quality, the fund looks for five attributes in the stocks it buys: competitive advantage, return on capital, growth, management and valuation. SBI Small Cap Fund is among the few in this space to remain at quite a man...
Read more

Myths about Exchange Traded Funds (ETFs)

1) ETFs Are Similar to Individual Stocks: Like MFs, ETF consist of an underlying portfolio of securities that's designed to follow a specific index or investment strategy. Hence, they are as diversified as various mutual funds. 2) ETFs Only Invest in Equity: Since they are listed on the exchange, the general belief is that ETF only consists of equity asset class. Globally, ETFs are available across asset classes – equity, debt, commodities, real estate and so on. In fact, over the past couple of years, India has also seen the emergence of Gold ETFs. 3) All ETFs Are Index Funds: ETF started as a fund which used to track indices and hence they were branded as index funds that are listed. However, ETFs have progressed rapidly and are no longer associated only with passive index funds. Globally, we have seen the launch of actively-managed ETFs. In India, also we recently saw the emer gence of fundamentally-weighted ETFs on Nifty, which busts the myth that ETFs are index funds and can...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now