A. It is the total unpaid amount of your
existing home loan transferred to another bank, which is offering a lower interest
rate. In simple terms, now you just have to pay your EMIs to the bank you've transferred
your loan to, at the new (and lower) interest rate.
Q. When should I consider home loan transfer?
A. You should consider home loan transfer
when:
The interest rate of your loan is higher than current market rates;
Your loan has a floating rate of interest and you want to reduce risk by opting
for a fixed rate of interest; and
You want to lower your EMIs.
Q. When should I not transfer your home loan?
A. You should not transfer the home loan
when:
You have repaid the loan for a long time;
Your current bank has a prepayment penalty; and
You plan to move out of the property in the near future.
Q. Will my refinance be affected by a prepayment
penalty?
A. Most banks these days do not impose a
prepayment penalty. If your bank asks for it, then you can request your new lending
bank to take it into account. However, prepayment penalty depends entirely on case
to case basis
Q. Can I borrow more than the pending amount
of my loan?
A. No, you cannot borrow more than the pending
amount of your loan.
Q. Should I transfer my home loan if the current
rate of interest does not dip significantly?
A. The chances of the market rate of interest
dipping lower are higher if you stay with your current loan for more time. This
saves you more money.
Q. Will the bank I transfer my home loan to
consider my eligibility evaluation done by the previous bank?
A. No. Any bank you transfer your current
home loan to will judge your eligibility for a loan starting from the beginning,
that is, from you filing an application for the loan.
Q. When I transfer my home loan, will income
tax deduction certificates be issued by the bank in the name of all co-applicants
of the primary loan?
A. As per Income Tax rules, only one certificate
is issued for a Home Loan hence one certificate will be issued which will have the
names of all the applicants.
Q. How much time will a bank take to transfer
my loan?
A. It might take 15-20 days for the loan
to get transferred because the home loan transfer process is repeated all over again
by the new bank the loan is transferred to.
Q. If my credit rating has dropped since I
got the primary loan, will it affect my loan transfer?
A. Yes, a lower credit rating will impact
your chances of loan transfer negatively as the new bank you transfer the loan to
starts the loan approval process from the beginning.
Q. Is it possible to balance transfer my current
loan to a different bank?
A. Yes,it is possible to do a balance transfer
of your loan from the current bank/NBFC to some other one if you have paid 12 EMI’s
in the past on the loan without any delinquencies.
