How to transfer Home loan from one bank to another bank?
Home loan is one big decision in a consumer financial life-cycle. Both as per amount and the tenure of loan is equal to 40-50% of our earning life cycle. The emi of a Home loan takes 20-50% of the consumer’s monthly income. On a lighter note it can be called the second wife for the male consumer.
Most consumers take this Home loan on a floating rate and thus the rates keep changing and its on the mind of the consumer every month. So when you take a Home loan be prepared to switch this Home loan between Banks.
Same Process to be followed for Personal Loan transfer from One bank to another.
Its both ethical and a smart decision that a consumer must take if he has a better option available with him. The saving that one can make while switching loans can be huge.
Look at savings you can make if you get a rate waiver for a 30 Lac loan.
|
Loan Amount |
Current Bank |
New Bank |
|
| 30 Lakh | Interest Rate | Interest Rate | Interest Rate |
| 10.60% | 10.35% | 10.10% | |
| Details | Rs. 30,153 | Rs. 29,650 | Rs. 29,150 |
| How Much You can save | Rs.503 per EMI
(503*240)= Rs.120720 |
Rs.1003 per EMI
(1003*240)= Rs.240720 |
|
Other things to check before making decision to Transfer
- Interest Rates– Which can save you most – i.e. Which other bank is offering lowest
- Processing Fee– The lowest fee, as this is one time fee.
So once you have a Home loan which can be transferred with savings
E.g
|
Loan Amount |
Current Bank |
New Bank |
||
| 30 Lakh | Interest Rate | Processing Fees | Interest Rate | Processing Fees |
| 10.60% | 1.00% | 10.10% | 0.5% | |
| Details | Rs. 30,153 | 30000 | Rs. 29,150 | 15000 |
| How Much You can save | Rs.1003 per EMI
(1003*240)= Rs.240720 |
15000 on P.F | ||
How to transfer this Home loan
- Apply at the new Bank for Balance transfer
- Once approved – go to existing Bank and inform your decision.
- Cordinate between the New Bank and the current Bank, so that money is transferred and new agreements are signed.
- Ensure all rights of the earlier Bank on property and other documents are returned.
- The ECS from the account which is paid as Emi to current Bank is stopped and for the new Bank is issued.
The process to shift to a new Bank takes 5-7 days and its easy if your track on the Home loan is good and you have a good credit history.
So if you have the option- and even if the process takes 1-2 days of your work we recommend that this should be done as it will save you a lot and at least more than the 2 days of work.
Every consumer after 2-3 years should review rates and shift to a better lender if required.
A consumer should also approach his own Bank if he feels the rates are higher as sometime the existing Bank on a fear of loosing good customer matches the new Bank rates with nominal one time fee.
