Pay attention to these things before transferring home loan to another bank, it will help in increasing savings
Often people transfer loans to pay less EMI.
But they do not calculate the cost of loan transfer.
Apart from this, do not pay attention to the creditworthiness of the new bank.
New Delhi. Home loan is the easiest way for a common citizen to raise money to buy a house. With this, you do not have to worry about paying a huge lump sum amount. Also, you can make up for it in installments on a monthly basis, which does not affect your pocket much. Home loan EMI consists of some part of the principal and interest which you have to pay to the bank every month.
If you do not like the facilities or interest rate of the bank, then you can also transfer this loan. This means that you have to pick up the outstanding amount and shift it to another bank and then pay in installments there. However, while doing this, you should keep some things in mind so that you can increase your savings further.
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Ignoring transfer processing fees and other costs
Before transferring the home loan to the borrower, it should be seen that how many other expenses including processing fee are going to be incurred in this process. The interest rate may be lower but your savings also depend on the tenure of the loan, balance transfer charges and other minor charges.
ignoring bank credit
Different banks impose different terms and conditions for home loans. Their services may be different from each other. If a bank is offering you better service, then this should not be the only reason for which you should change the bank. You should also see its market reputation. For example, how has been the track record of the bank, what is the level of transparency and how is the review of the people etc. Any kind of suspicious behavior can create trouble for you in future.
falling into the tenure trap
Borrowers should carefully look at the home loan tenure before opting for the balance transfer option. This is a very important aspect. Suppose your EMI is lower because the tenure has been extended, in this case you are transferring more interest and the total loan will ultimately cost you dearer.
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Tags: Bank loan, business news, Home loan EMI, Tips and Tricks
FIRST PUBLISHED : November 28, 2022, 17:23 IST