Hyderabad: Home loan is the way to fulfil the dream of owning a house. Banks and housing companies are now lending loans at 6.40 to 6.60 per cent interest. It is attracting a lot of people. While some, who have already taken a loan are paying high-interest rates though the loan is available at an affordable interest rate. Hence, they are trying to transfer their loan to another company.
The primary goal behind transferring a home loan from one company to another is to save money on the interest rate. Banks/mortgage companies consider several factors in determining the interest rate for a borrower. Especially credit history and credit score. There are inspection and maintenance fees when transferring a loan. Documents must be submitted in the same manner as the new loan.
There are documentation costs and other charges. All of these need to be taken into account. The decision should be changed if you feel like there are no greater benefits with the loan transfer. Check if there are any facilities like overdraft while transferring the balance. An overdraft account must be opened in addition to the new home account. The borrower should deposit his or her surplus amount in it. Cash can be withdrawn from this when required. When calculating the interest rate, interest is charged on the remaining amount, excluding the amount in the overdraft account. This will reduce the burden in the long run.
Read: Home Loan: Things to do when you are not able to pay EMIs
There is no big advantage to transferring a few years after taking a home loan. Therefore, one should move from a high interest-bearing bank/institution to a low interest-bearing loan at the outset. The interest portion is charged at the beginning of the loan. The actual portion decreases over time. If we change the loan after a while .. we will already be paying a lot of interest. Then, we have to pay interest again, this is a huge burden on the borrower. Ensure that both the term of the existing loan and the term of the new loan are the same. For example, the current loan term is 20 years. Suppose you have already paid for two years. The remaining 18 years should be kept when transferring the loan. The deadline can be extended to reduce the EMI burden. But, do not forget that the interest burden is commensurate with it.
If you want a top-up
"There is a facility to take a top up on an existing home loan. The lenders offer this when the installments are paid regularly. The interest rate on this loan is the same as a home loan. Sometimes suppose you really need a top-up loan. If this is not given .. the loan can be transferred to a new company and a large amount can be taken as a single loan," said Ratan Chaudhary, Head of Home Loans, Paisabazar.com
