INSUBCONTINENT EXCLUSIVE:
Home Loans are a long-term financial
commitment with tenures typically ranging between 10 to 30 years
During this time there is a possibility that you may not be happy with your bank or lending institution, or that your existing interest rate
current lender to another
However, as a borrower, you need to look at other aspects as well before moving your loan.Document Vetting for RefinancingEven though it's a
transfer of a loan, it is still a new loan for the lender, for which they would require all documents that you originally gave your current
lender for vetting process
Your financial statements may have also changed since you availed the loan, so that will also have to be made available through pay slips,
Form 16, income tax returns and more.Processing FeesSince this will be like refinancing your loan, there is bound to be a processing charge
Most banks and NBFCs charge anywhere between 1 per cent and 3 per cent of the remaining loan amount to be paid back as the charge.Waiting
PeriodYour loan agreement with your current lender will determine when you are allowed to transfer your loan
You will have to wait until you pay the stipulated amount or complete the waiting period as stated in your agreement before you can find a
new lender.New Tenure and Interest RateThe point of transferring your home loan is to get a better deal, unless you have severe service
You should try and reduce your tenure in such a scenario to pay off the loan earlier and also look out for lenders who offer a better
rate.Clear Any Pending DuesThe bank will need to give a clearance certificate that will allow the new lender to take charge of the loan
For this clearance you need to make sure that all your pending dues are clear
For instance, pending EMIs and late payment charges need to be paid off before you can transfer your loan.Also if your home loan is on a
fixed interest rate, you will have to pay a pre-payment penalty to transfer your loan
You may want to rethink about transferring your home loan in such a scenario as the penalty may eat up on the advantage given by the new
lender.Collateral RevisionHome Loans are automatically collateral loans as the said property papers will lie with the bank until the entire
If you have already repaid a huge chunk of your loan, do not offer the complete original collateral to your new bank
It is like giving a security which is double the amount of your loan outstanding in some cases
You can use it to take a separate loan instead, if the need arises
Instead, offer your new bank a lesser amount of collateral
If the bank still insists, negotiate for reducing the interest rate further.(Adhil Shetty is CEO of Bankbazaar.com)Disclaimer: This is an
advertorial and TheIndianSubcontinent is not responsible for the accuracy and completeness of the same.
