If the interest rate of your home loan is high, then you can consider transferring the loan to another financial institution. This can give you the benefit of a lower interest rate. However, it is very important to pay attention to some things before transferring the home loan. Let us know about it in detail.
While taking a home loan, most people look at which bank can give them quick and easy loan. In such a situation, many times we take home loans from those banks whose interest rate is higher than some other banks. Or after taking the loan, we come to know that the interest rate of some other bank is lower.
If the interest rate on your home loan is high, then you can consider transferring the loan to another bank. This can give you the benefit of a lower interest rate. However, it is very important to pay attention to some things before transferring the home loan.Talk to your existing bank
Transferring home loan should be the last resort. You should first talk to your existing bank or financial institution to get some concession in interest rates. If you have a good credit history and you are paying your installments on time, then it is possible that the existing financial institution may give you concession.
Also Read- Home loan hidden charges: Apart from processing fees, banks do not tell these rules to customers, know here
Pay attention to the transfer charge
It is also important to pay attention to the additional charges while transferring the home loan to a new financial institution. In this process, charges like processing fee, application charge, administration fee and review fee may be levied. This applies to both the existing bank and the new financial institution. Transferring the home loan will be beneficial only if your total interest amount of the new financial institution is less than the interest amount of the existing bank.
Pay attention to the terms and conditions
While applying for a home loan, most of the terms and conditions need to be taken care of. This can cause problems in the future. Also, if you are close to completing the loan tenure or you have planned to sell the property, then generally you should avoid transferring the loan.
How to transfer home loan?
- First, compare the interest rates and terms of different financial institutions.
- Check your eligibility and apply for a new loan.
- Submit required documents like income proof, address proof, identity proof.
- Apply to close the old loan and start a new loan.
- Monitor the new loan and make adjustments if necessary.
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