Important Things to Consider before Transferring Your Home Loan

The double whammy inflation, in the form of soar prices of goods and services and the increasing rate of borrowing, is undoubtedly a cause of worry for the common man these days. If you are too worried about the inflating rates of a home loan as they are slowly picking up your monthly budget, then you can surely think about transferring the home loan to another bank. Don’t worry! In most of the cases, you don’t have to bear penalty charges, and instead, you will be awarded additional benefits like insurance cover, top-up amount etc. Out of different loan options, HDFC Home loan interest rate is considered to be a viable option.

Here are a few things that you must keep in mind while considering your option to transfer a home loan:

1. Exploring the possibility of a home loan: Certain banks have a strict clause regarding the balance home loan transfer as they don’t permit to transfer the loan amount with other institutions. Thus, you must first check all the terms and conditions before looking for options for home loan transfer.
2. Negotiating with the current bank: If the current bank does not allow the home loan balance transfer, you can negotiate with your bank for the home loan interest rates. Banks usually try to retain their current customers, so they might offer you specific discounts on the home loan rates if you have a good repayment record and paid all the earlier dues on time. It would save not only your time but also efforts to file a new application for the procedure of transfer of the loan.
3. Checking the interest rates of other banks: If things do not go well, then you can start exploring the market. You can start by checking the interest rates of big banks. You may also hold a one-to-one meeting with a few banks to negotiate about the pricing on the home loan rates.
4. Shortlisting the banks: As you follow the above procedure, you must shortlist a few banks and then check the details about the checklists for transferring the home loans. You must compare the benefits and services of these banks available for home loan transfer. There are individual banks which provide top-up loan facility and insurance cover as well on the home loan transfer. Also, you must check the reviews of these lenders on the real-estate platforms before finalising the bank for transferring your loan.
5. Calculating the home loan transfer costs: Without a say, getting a home loan at a lower interest rate is undoubtedly tempting, but you should not get carried away by the lower interest rates. You must check that banks don’t charge any hidden costs on these loans. Also, there are various other charges such as processing fees, technical fees, application fees and administrative fees etc. The current and the new bank may also charge transfer fees on home loan transfer. Before finalising the bank for transferring the home loan, you must calculate that these costs do not add up to more than the present costs of a home loan at a higher rate of interest. If that is the case, you must think about other lenders or cancel your plan for a home loan balance transfer.

Do you know how to transfer the home loan?

If everything goes as per the plan, you must obtain a No-objection certificate along with the home loan statement for the outstanding dues from the current bank for the home loan balance transfer. These should then be submitted to the new bank, after which the new lender approves the loan amount. The property documents are then transferred to the new lender.

Conclusion: You must carefully examine the pros and cons of home loan balance transfer as it can hurt your pockets.

Summary: Important Things to Consider before Transferring Your Home Loan

Worried about the inflating rates of a home loan as they are slowly picking up your monthly budget?  You can surely think about transferring the home loan to another bank.

Important Things to Consider before Transferring Your Home Loan 

1. You must first check all the terms and conditions of the current bank regarding home loan transfer before looking for options for home loan transfer.
2. If the current bank does not allow the home loan balance transfer, you can negotiate with your bank for the home loan interest rates. Banks usually try to retain their current customers.
3. If things do not go well, then you can start by checking the interest rates of big banks. You may also hold a one-to-one meeting with a few banks to negotiate about the pricing on the home loan rates.
4. Next, you must shortlist a few banks and then check the details about the checklists for transferring the home loans. You must compare the benefits and services of these banks available for home loan transfer.
5. You must check that banks don’t charge any hidden costs on these loans. Also, there are various other charges such as processing fees, technical fees, application fees and administrative fees etc. Before finalising the bank you must calculate that these costs do not add up to more than the present costs of a home loan.