Please assign a menu to the primary menu location under menu
home loan transfer
home loans

Home loan transfer or refinancing option to pay lesser EMIs

A home loan transfer is quite simply changing the lending institution for your existing home loan and avail the benefits available to new customers in the prevailing market.

 

 

Scenarios when home loan customers go for home loan transfer or refinancing option- 

 

Mr. Sharma has taken a home loan from X bank at 10% and he has been quite diligent in serving EMIs for last 2 years. One day he gets to know that Y bank is offering 9.10% to new customers taking home loans. He becomes tense and thinks why i should be paying more?

Mr. Rakesh is looking for bigger term and lesser EMIs so he may have more cash with him on per month basis. He starts looking for new bank which can give him bigger term and lesser EMIs on the same home loan.

 

In both these situations home loan transfer is a very wise option on consumer’s part.

 home loan transfer

 

How Home Loan Transfer is Possible?

Well yes. A home loan transfer is also known as refinancing or balance transfer. This is an option that most individuals opt for to avail the benefit of lower interest rates prevalent in the markets. Generally, the existing borrower of a bank, who is about two or more years into his loan tenure, does not get the benefit of falling interest rates in the market.

Customers interested in availing this could discuss with their bank on re-negotiating the interest rates based on the good repayment track record, etc. If the bank is not amenable, then they could shift to a bank that offers a lower interest rate.

 

 

How does the process work?

This requires the need of submitting a request letter to the existing lender for a home loan transfer. Based on their conveyed request, the bank will give a consent letter / NOC and a statement mentioning the outstanding amount. This needs to be provided to the new lender, who then sanctions the new loan amount to the previous lender for an account closure. Once the transaction is over, the property documents will be handed over to the new lender, and the remaining post-dated cheques / ECS will be cancelled.

The new bank that is being shifted to, will offer you a loan based on the current home loan rates they are offering to their home loan applicants. Click here to read more about Right time to switch your home loan.

 

 

What are the costs in refinancing option?

A good home loan consultant must be able to get 100% waiver on all costs like processing fees of new bank and pre-payment penalty by existing bank. A prepayment penalty was earlier charged by the existing lender, which can vary 1% to 2%of the principal outstanding of the loan at the time of refinances. Some banks like ICICI, SBI and PNB etc. have waived this fee, but some banks could still be charging a penalty. It is recommended to check with your bank and try to negotiate a waiver as the RBI and the NHB (National Housing Bank) mandates clearly are not in favor of a penalty for prepayment in the case of a floating interest rate loan. Also one should remember that they will also need to pay a processing fee to the new lender, which could also be negotiated and waived in this high interest rate regime. This can range anywhere between 0.5% and 1% of the loan applied. Most banks restrict this amount to Rs 5,000.

 

Consider all these costs when comparing the total loan cost between the two offers. If you feel there is a significant amount of interest to be saved from the move then you can make a profitable switch. 

It should be well noted that for a home loan transfer one needs go through all the procedures involved afresh. These include a credit appraisal, legal verification of property documents and technical evaluation with the new bank. A loan will be approved only when conditions are met. This also includes the good CIBIL score.

A good home loan consultant must be able to take you through all this process without attaching any extra cost to you. 

 home loan transfer or refinance your home loan

 

Apart from saving on interest there are scenarios other than discussed already for home loan transfer, which include:-

 

Bank does not agree to change loan terms: You might want to re-negotiate certain terms and conditions with your bank. For example, you might wish to extend the tenure of your loan to lower your EMI, but your bank may not be ready for this.

 

Top-up loans: The property value might have climbed much higher from its original price. On the basis of this you might want a top-up loan to meet a financial requirement or for a home renovation perhaps. If your lender is not open to finance this you might opt for a new lender.

 

 

It is mandatory to get a statement from the current lender stating that property documents will be dispatched within a certain time frame to avoid hassles on this front.

Also, remember that a loan switch will not be possible if one have been irregular with loan repayment with the current lender. Therefore, we mentioned that maintaining a good reputation with banks and a good CIBIL score are both, equally important and necessary, and mandatory.

 

 

 

We hope that we have answered all the possible questions on home loan transfer.

So considering all aspects, home loan transfer is a good option to lower your EMIs and overall pay lesser.

 

 

Kindly give your feedback in comment box

And

For more information call us on 9529331331

 

 

 

  • Shreya Sharad

    SHREYA SHARAD
    Above article provide great informational.
    regarding home loan transfer or refinancing.
    Home loan transfer is an option that allows you to benefit from a downward movement in lending rates. Lending rates often change with market condition
    . Can a home loan transfer benefit you ?Now in my view there is no clear yes or no answer tha home loan transfer will benefit you. It can.benefit you only in.certain condition, even if a bank offers lower interest rate it may not be economically viable to transfer a home loan if savings are not enough to justify the time ,efforts and cost. Fators contribute to consider whether to transfer a home loan or not
    1) Total cost- cost is involved in.balance transfer. Total savings can be determined after considering the total cost involved.
    2) Remaining loan tenure- it is also cucial factor, if there is less time left in completion of the loan tenure then it might not be worth making the effort for a home loan transfer.
    3) oustanding principal- bigger outstanding principal justifies the cost more due as the total savings are more.
    4)Time and effort- cannot be measured in.monetary terms.
    Home loan transfer can benefit you in certain conditions. However the decision should be made after careful cost benefit analysis.
    Should refinance your home loan?
    Refinancing means is taking a new loan to pay out your current mortgage. Reasons to refinance are-
    1) Lower interest rate
    2) option of lowering tenure
    3) increse the loan tenure to reduce emi
    4) shift from floating rate to fixed rate, or vice versa
    Refinacing your home loan comes at charge, which differs from bank to bank.just make sure that profit which you make by opting refinacing is higher as compared to the fee and charges you pay.

  • Swastik Miniyar

    Refinancing is really a good option to pay lesser EMIs or can extend the term than previous on the same home loan.
    It will mostly gives benefits. But to avail those benefits, you have to spend your time & put some efforts. Also you have to do some research that which bank is giving you loan at cheaper rate.
    Most important thing is to pay processing fee to new lender. If your loan amount is greater than Rs. 500000, it will be more beneficial. Because most banks restrict processing fee to Rs. 5000.
    To apply for refinancing you should consider:
    1. You should have good CIBIL score.
    2. You have been paid your earlier installments regularly.

  • Srajal Gumasta

    Home Loan transfer or Refinancing is a profitable but cumbersome job. The borrower on the one side gets the benefit of low interest rate but on the other hand the buyer has to face the problems like- current high price market price of house, existing bank dispatching procedure which is time consuming as well as involves lot of paper work and other loan transferring formalities.The borrower also faces problems of proper verification of documents and identity in the new bank, processing charges and has to understand new banks policies which often vary from the current banks policies.
    But on the other hand once this initial procedure of transferring of loan from one bank to other is done the borrower enjoys paying less EMI’s to the new bank and for a longer tenure and resulted as a win win situation for a buyer.

  • Jalvir Karia

    why pay more when you can pay less ? Isn’t this the thought that almost all of us today live with ? Let’s assume a situation wherein you buy on of the best flagship phones out there in the market, a month down the line a better variant of the same phone comes out in the market at the very same cost, wouldn’t you feel disapointed ? well what if someone told you you could exchange your old variant of the phone for the new one that would just make your day wouldn’t it ? well now imagine the same scenario with the loans you go on and procure a loan at a certain interest rate, a couple of years down the line due to the market situations change and the rates fall. now comes the point of time when you exchange your old phone for new. Now with the help of refinancing you could switch your lender to the bank that charges you a lesser rate of interest. And the icing on the cake would be if you could do it without having to pay the processing fees. well, this is where regrob comes in, regrob offers its customers loan refinancing at “0” processing fees. so think again why pay more when you can pay less ?

  • Subramanyam Rao

    The article provides great insights about transfer of home loans or Refinancing, which is a great instrument present in the hands of customers with good installment track record and CIBIL Score.To reduce the interest on the principle(due to changes in interest rate in the market) that is to be paid or to reduce the monthly EMI’s from their pocket.
    But, to avail the opportunity the borrower need to do continues research about the changes in the markets which is time consuming and difficult process and new in Indian context.This is where the advice and help of the firms like REGROB who are in touch with the market changes and clear idea of the process of refinancing is necessary to understand whether to go for refinancing or not and to get benefited out of it.
    Top-up loans is one such opportunity which can be utilized by the borrower to renovate or to meet financial requirements.

  • Palak Tuteja

    Refinancing a home loan is taking a new loan to pay out your current mortgage. There are many common reasons why homeowners should refinance:
    Lower interest rate (most popular)
    Option of lowering tenure if one has monthly surplus
    Increase the loan tenure to reduce EMI payments
    Shift from floating rate to fixed rate, or vice-versa
    Regrob being in touch with the market changes gives a clear idea to the customers about refinancing and its benefits.

  • Adesh Mallick

    The article provides a better information to customers about how to transfer home loans from bank to another bank if they get a better interest rate on their home loans after negotiation and in the current scenario it will be most useful n beneficial process for the customers.
    Among the above process TOP UP LOANS process is a very useful intrument for consumers whch will help them in financial terms to a great extent.
    All these above process can only be reached through Regrob as it will be less time consuming for the customers.

  • Prasanth Muralidharan

    There are various smart ways to monitor and and manage your home loan.
    Everyone goes through various cycles in terms of life and those individual goals can be very different which alters and makes it difficult to repay their home loan.One of the ways are to refinance the home loan to the current interest rates by renegotiating or bank transfer, the second way is to extend the loan term. The third way is to go through this process with Regrob with 0% processing fees on balance transfer cases which assures you a profitable switch. THINK DIFFERENT, THINK REGROB.

  • SNEHA DAMANIA

    Having a home in today’s world is everyone’s dream,and yes banks do help us accomplish those.But at what cost?
    This blog by Regrob is truly an eye opener for many customers already holding a loan with them.It is helping to generate Financial Literacy among the customer by introducing them to Refinancing,which gives customer the option to avail the benefits of lower interest rates prevailing in the market. You can switch to the banks providing lower interest rates by following certain steps and financial formalities. It also helps to understand few glitches which we might face while choosing this option. You could enjoy the benefits of lower interest rates by renegotiating with existing banks , increase in EMIs to decrease the tenure of your loan or vice versa, or choose this option of refinancing with Regrob as it gives you chance to avail this benefits by charging “0%” processing fees to their customer. All you have to do is sit back and relax,as Regrob does wonders for you.