Factors To Note Before You Opt For A Home Loan Transfer

Are you currently happy with the loan that you have opted for? If you are not, do not worry! There are plenty of options that are available for you. What is extremely important for people is the interest rate that is offered by banks and financial institutions. Of course, the lower the interest-rate, the higher the chances for a person to opt for that loan would be even if it means switching banks of financial institutions!

Transferring your home loan or refinancing is an option that many applicants opt for owing to the low interest rate that is offered by them. This is done so as to save money and a person switches from one bank/financial institution from another in the process.  This option is available from all the banks in India and other financial institutions which offer different home loan options to people.

                       

So how does this process actually work?

If a person wants to request for a loan transfer, the first thing that they need to do is to submit a letter to the existing lender requesting for the transfer of loan. Only after this, the bank will provide a NOC/consent letter as well as a statement which mentions the outstanding amount. This document will also have to be provided to the new lender; who is responsible for sanctioning the loan amount to the former (old) lender for a closure of the account. Once this has been done, then all the property documents will be handed over to the new bank (lender) and the balance (remaining) post-dated cheques (ECS) will be cancelled (nullified). Thus, based on the prevailing, current home loan interest rates the bank will then issue the applicant a loan.

However, other than saving on interest amount, there are other factors why a person would switch. Some of these factors include - the bank is not agreeable to change the loan terms, there are service issues, the lender might not be able to finance a top up loan, etc.

Some of the important things that applicants who want to switch should bear in mind include:

1) If a person wants to switch, it is always better to do so early on the loan tenure.

2) If you are irregular with your loan repayments, you might not be able to switch.

3) It is always a wise idea to ask for a statement from the current lender which states that the property documents will be dispatched within a certain time frame. This can help to prevent any hassle that may arise.