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Home Loan Transfer

As i mentioned in one of my previous post “Step Motherly Treatment to Existing Home Loan Customers” that existing customers always pay higher Interest Rate compared to New Customers. First thing which come to the mind of borrower is Home Loan Transfer from existing lender to new lender who is offering lower interest rate.

Besides Interest Rate, sometimes Service issues also force borrower to opt for Home Loan Transfer though Interest Rate remain single most imp criterion for Home Loan Transfer. Before deciding upon Home Loan Transfer, it is critical to consider following 5 points to avoid any future disappointment

1.  Home Loan Transfer is like applying for New Home Loan

The biggest mis-conception among borrowers is that Home Loan Transfer will be easy and smooth process compared to new Home Loan application. Let me clarify that for New Lender, Home Loan Transfer is any other new Home Loan application. The borrower has to undergo complete Home Loan process again. The complete documentation is done again before Home Loan is approved. Also, please note it is not necessary that New Home Loan lender will approve your Loan Transfer (read New Home Loan) application. In many cases, if new lender is not satisfied with legal documentation then your Loan Transfer request will be rejected. Some Home Loan provider like DHFL, Tata Capital or Cooperative banks are bit soft on eligibility & documentation criterion. If you transfer Home Loan from these institutions to say SBI then in all probability your application will be rejected unless you provide all documents required by SBI.

2. Financial Benefits of Home Loan Transfer

In my opinion,  if you are transferring your Home Loan for reduction in Interest Rate then it is advisable to transfer only if the Interest Rate offered by new Lender is lower by 2% from existing Interest Rate on home loan. If difference between new and old interest rate is less than 2% then financially Home Loan Transfer is not beneficial.

3. Remaining Home Loan Tenure

If remaining tenure of  existing Home Loan is less than 5 years then it is not advisable to opt for Home Loan Transfer. Reason, you will not get any financial benefits considering cost attached to Home Loan Transfer even with reduced Interest Rate.

4. Home Loan Transfer Cost

There are no free lunches, Please check on cost attached with transfer. Keep in mind that you again need to pay Processing Fees. Even if, Processing fees is waived off but some Statutory Costs like o.1% Stamp Duty on MOD etc cannot be avoided. These costs vary from state to state, kindly check on all cost elements before deciding.

5.  Communicate with Existing Home Loan Provider

Last but not least, before taking final decision it is advisable to discuss with your existing Home Loan Provider. Even they also don’t want to loose customers. Trust me, if you inform existing loan provider regarding Home Loan Transfer then they go extra mile to retain your account. Reason existing loan provider has borrowed your Home Loan money with long term commitment. It is administrative hassle and loss making proposition for existing loan provider to again lend the money pre-paid by you while transferring Home Loan.  If you are transferring, only to reduce Interest Rate then in all probability existing Loan provider will reduce your interest rate by charging conversion fees (vary between 0.5% – 1% of outstanding loan amount). You can opt for such offers rather transferring Home Loan.

I hope, i clarified all the points related to Home Loan Transfer. Please take your decision after careful consideration. There is no universal formulae to decide on Home Loan Transfer as each Home Loan case is unique.

Please feel to ask your queries/clarification in the trail Comments section. I will answer the same.

Copyright © 2011-2013 Nitin Bhatia. All Rights Reserved.

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Amita J
Amita J
10 years ago

Hi Nitin, first of all, you are doing great service to novice like me by sharing your knowledge. I am talking to Citi Bank for transferring my current loan with Indiabulls. They are offering me top-up loan with Home Credit Account (like SBI Max Gain). The interest rate difference is not more than 1% from what I pay to Indiabulls.

I have checked with IDBI as well as ICICI and they also provide top-up loan value. But not sure which one to go ahead with.

I am opting top-up loan to settle my car loan. I do not need more than 23 Lacs as combined loan value.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Amita J

Financially its not beneficial to transfer Home Loan for 1% interest benefit. As i mentioned in my post, min benefit should be 2%. You may apply for top up loan with Indiabulls.

sunii
sunii
10 years ago
Reply to  Nitin Bhatia

Hi Nitin,
First of I would like to thanks U for such a good information.
Now below are my doubts.
I have took a home loan of 36 lac on oct, 2012 from AXIS bank for 10 years with ROI 10.75% intrest and my EMI is 50,000.
On 30-Dec-2013 I prepaid 7,50,000. Now My home loan is 25 Lac and I am planning to transfer it to SBI. My current ROI is 11.00%
SBI is offering 10.15%. Also they are having Max Gain facility, which is very helpful.
Even though you have mentioned that it’s good to transfer the home loan only if the difference is more than 2%.
But after transfering the home loan My EMI is becoming 38,000. Almost 12,000 less then current.
So, what did you mean by point 2(Transfer home loan only if the difference in ROI is more than 2%).
Please elaborate.
Also I would like to know, Should we prepay our home loan. If yes, then should we reduce term or EMI??
Many people say that its good to have a bit of Home loan (arround 15 lac) as it helps for tax saving.
Thanks,
Sunil.

Bijesh P
Bijesh P
9 years ago
Reply to  Nitin Bhatia

Hi Nitin – I have a home loan of 20 lakhs with Axis bank for 17 years with floating interest rate 10.25%. Loan was taken in Aug 2014. This was based on the sale agreement value of about 30 lakhs and I had my apartment registered for 16 lakhs, which was the circle rate in Bangalore. I want to transfer my home loan to SBI. Initially when I approached SBI for home loan, loan was feasible only based on registration value and hence I opted for Axis bank. Now that the loan got sanctioned and the property is registered, will there be any issue for transferring the loan to SBI ? Will there be any issues since the agreement value is different from registration value ? Wondering if any experience to share here

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Bijesh P

You can easily transfer Home Loan to SBI but i don’t foresee any compelling reason for same as you will again incur cost to transfer Home Loan. Current ROI offered by axis bank is at base rate of 10.25% only with 0% markup. It is best scenario for any borrower because your ROI will decrease as and when bank will reduce base rate therefore i will not suggest Home Loan Transfer.

Anoop
Anoop
10 years ago

Hello Mr Bhatia,

I had borrowed home loan from DHFL because of high interest rate now I am transferring it to PNB. PNB is approved loan application and disburse remaining amount to DHFL. When I talk to DHFL regional office they told me you had to pay prepayment charges. When I told about RBI guideline, they agree not to pay prepayment charges. I have deposited the DD on 4 Oct 2013 to DHFL office. Now they told me that I would have to pay October EMI in full. I contacted to customer care and they told me same. Is it the standard procedure according to RBI guideline ? I have to pay full EMI for the month or I would have to pay until DD is cleared.

Please suggest me what is the standard or RBI guideline on this.

Thanks
Anoop Namdev

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Anoop

Both DHFL and PNB HFL are HFC therefore governed by NHB not by RBI. Even as per NHB guidelines, there are no pre-payment charges for loan closure.

You need not to pay full month EMI if you are closing the loan before 31st Oct, 2013. Suppose you are clearing principal outstanding on 20th Oct then you need to pay simple interest from 1st Oct to 20th Oct on principal outstanding as on 30th Sep.

Anoop
Anoop
10 years ago
Reply to  Nitin Bhatia

Thanks Mr. Bhatia for your valuable suggestion. I told same to DHFL Regional manager but he is not agree with that. Any NHB circular available so i could show them.

If they force me to pay full month EMI, What should do in this case?

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Anoop

Hi,

NHB circular regarding pre-payment penalty is available at following link
http://www.nhb.org.in/Regulation/scan0019.pdf

You can complaint to NHB or can also approach Consumer forum against DHFL.

Anoop
Anoop
10 years ago
Reply to  Nitin Bhatia

Thanks Mr Bhatia, I have checked all links but there is any regulation regarding full month EMI.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Anoop

EMI is calculated as i shared. If you are prepaying or closing the loan during the month then you need to pay principal outstanding as on last date of previous month and Simple Interest for no of days lapsed in current month. There is no regulation regarding full EMI

Nitin Parmar
Nitin Parmar
10 years ago

Thanks Nitin for this valuable post.. I’m sure this information helps many who are looking to transfer their current housing loans to other providers.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Nitin Parmar

Am glad, you liked my post. Keep Reading :)

ashish
ashish
10 years ago

Dear Nitin sir,

I wish to transfer my home loan from LICHFL, rather forced to transfer as the interest rate has gone up in last 4 years and the EMI has increased by almost 4k. Unfortunately LICHFL does not provide the facility of conversion to a lower rate unlike the banks viz. ICICI. After talking to a few banks, I realised that most of the proposals are similar barring the 0.25% difference in ROI as well as Processing fees. Most of them also ask you take an insurance cover which raises the cost of transfer by around 10k to 13k. ( LICHFL Did not take any insurance cover).

Today I happened to visit Saraswat bank and they offered me the best rate possible @ 9.95%. Other terms seemed reasonably fair to me. My question to you is,

is its advisable to go to a co-op bank for home loan?

and in case my EMI goes up again in next 2 to 3 years will I be forced to switch my loan again? (Saraswat bank does not allow the converesion of ROI to a lower ROI unlike ICICI or any other PSU bank).

Awaiting your reply.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ashish

I will not suggest home loan from co-op bank until unless you face problem in getting home loan from regular banks.

You may go ahead with canara bank they offering home loan @ same ROI as Saraswat Bank. Also processing fees is waived off till Dec 31 under promo offer.

Last but not least insurance cover is not mandatory and you should not buy the same. Rather buy term insurance plan. For more info on Home Loan Protection Plan, you may check my following post

https://www.nitinbhatia.in/home-loan/7-reasons-why-you-should-not-buy-home-loan-protection-plan/

ashish
ashish
10 years ago
Reply to  Nitin Bhatia

Dear Nitin,

Thanks for the reply.

The Canara bank officer told me that I will have to buy the insurance cover. For an O/s loan of 18.50 lac the insurance costs INR 13k, one time.

The reason i tempted to go for Saraswat was their ROI is 9.95% and they a brownie of offering their shares offers good dividend.

If you don’t mind please guide me on one thing. In case the rate go high again in my loan will i be able to switch again in 2 to 3 years?

Indeed, the loan transfer is not an easy process. So many hidden clauses and contingencies that may arise in future that a layman is unaware of. Everyone seems to be taking him for a ride in this competitive world.

This site is like a lighthouse to people like us. Keep up the good work.

Regards,

Ashish

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ashish

You may switch after 2-3 years but transferring loan too frequently might impact your CIBIL score negatively. I will suggest you to take informed decision at this stage only so that you need not to re-consider the same in future.

Also as i mentioned earlier, Insurance cover is not mandatory with Home Loan. You can refuse to opt for insurance cover.

ashish
ashish
10 years ago

Dear Nitin,

I have decided to go with SBI for transfer of my home loan from LICHFL.

I received a foreclosure letter from LICHFL. LICHFL have added a Document retrieval charge of Rs. 2,800/- to the outstanding amount. What kind of charge is this? Can you guide me if this charge is justified and is allowed as per any guidelines?

Also it is mandatory to obtain a property insurance while transferring the loan? Can bank force it upon us to go for it?

Regards,
Ashish

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ashish

Document Retrieval Charges are the charges levied at the time of loan closure/pre-closure. It is basically a cost of transferring original documents from central document repository to the borrower. Normally all original documents received by banks are divided into 2 i.e. (a) Most Important documents like Sale Deeds and (b) General Documents like Khata, NOC from association etc. Most important documents are kept in safe custody at central repository and is being normally managed by 3rd parties. General Documents are kept at Loan Location.

Suppose you took loan in chennai from HDFC Ltd. The central repository of HDFC is in Mumbai. All important documents will be shifted to Mumbai and general documents will be in Chennai. When the loan is closed, HDFC will charge document retrieval charges to transfer documents from Mumbai to Chennai. Best in class courier service is used for safe transfer. At the time of availing loan these charges are included in processing fees.

There is no standard guidelines on Document Retrieval Charges & each lender charge differently.

It is not mandatory to avail Home Loan Protection Plan from Bank. Bank cannot force upon same. You may complain regarding the same.

ashish
ashish
10 years ago
Reply to  Nitin Bhatia

It seems we are at the mercy of lenders. These kind of charges re never disclosed by the lenders. I really appreciate your help. Great work.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ashish

I agree with you. We need strict regulations to correct this.

ashish
ashish
10 years ago
Reply to  ashish

Dear Sir,

The bank is now telling me that it is not mandatory to avail life insurance policy in the borrower’s name, though it is advisable. However it’s compulsory to take property insurance policy. This is a bit confusing. Please guide.

Is there any such body/ forum working to spread awareness and represent the borrowers to government regarding these practices? Almost every big institutions/ banks have floated limited companies who are not under RBI purview and can have their way with the borrowers. viz. LIC has LICHFL, ICICI has ICICI home finance.

Regards,

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ashish

Though it is legally not compulsory to take property insurance policy but i will recommend you to opt for same. Its not costly. It is not necessary to buy from SBI. You can buy from ICICI Lombard as it covers damage due to terrorism also for 1st year.

There are some bloggers like me who are making efforts to spread awareness but there is no legal body representing borrowers. Its a good thought to form legal body/forum.

Suresh A
Suresh A
10 years ago

Dear Nitin,

Recently I have preclosed the home topup loan with DHFL but after reading your blog I feel I have been cheated by the bank. The have charged me the interest for full month even tough I have closed the loan on 6th Nov and also charged me with Document retrieval charges, I asked the branch manager what documents will be given to me since my home loan is not getting closed. He as bluffed me without giving any proper answer. Also charged 3% foreclosure charges.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Suresh A

Its quite unfortunate and i can empathize. You may send written complaint to NHB. Format can be downloaded from following URL

http://www.nhb.org.in/Grievanc

Address of NHB is
CR Cell,
National Housing Bank,
NHB Core 5 A,
India Habitat Centre,
Lodhi Road. New Delhi- 110003

Reena
Reena
10 years ago
Reply to  Nitin Bhatia

Please let me know whether they r charging Penalty on Foreclosure. i am planning to switch to SBI, I have Home Loan on Floating Rate, taken in 2011.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Reena

There is no penalty for foreclosure or pre-payment of floating interest rate linked Home Loan.

Raja
Raja
10 years ago

Hi Nitin,
I have taken a home loan amount of 25 lacs from LIC with floating ROI 10.4 % on Oct 2013 for 20 years. They have cheated me by increasing the ROI to 11.65% after 6 months. Now i am paying 11.65 % ROI. I am planning to transfer from LIC to Canara bank since they offer 9.95% and hope even if they increase it will not be like LIC. Please suggest your input.

Regards
Raja
Bangalore

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Raja

You may transfer to Canara bank. Before taking final decision just check following post

https://www.nitinbhatia.in/home-loan/home-loan-transfer/

Nitin Bhatia
Nitin Bhatia
10 years ago

1. Yes, you can include your father. He should be earning member else banks might not accept him as co-borrower.
2. First Home Loan is approved then the property is registered.
3. You need to pay entire amount at the time of registration. If you take loan afterwards then it will be loan against property. ROI on loan against property is high compared to home loan. I will not suggest

rohit
rohit
10 years ago

Nitin Bhai…. I have an existing loan from CITI bank at an interest rate of 11.25%. And they are not ready to give me a top up with the same rate… Besides HSBC is offering a rate of 10.25% (base rate 10 and a spread of 0.25). No processing fees and no insurances cost. Also I will get the required top up amount that I need at the same rate. Now my queries are
1. IS HSBC a good option?
2. Will they increase or rather can they increase the interest rate according to their own whims and fancies? I mean lets say, if RBI increases the rate by 0.25 – can HSBC increase my rate by 0.5 or 1%?
3. Can HSBC increase the rate by 1 or X % even if RBI has not raised the base rate?
4. When RBI reduces the rate, HSBC will have to follow it mandatorily or HSBC may not lower the rates?
Regards,
Rohit

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  rohit

Please check my following post on Home Loan Transfer before taking final decision

https://www.nitinbhatia.in/home-loan/home-loan-transfer/

1. No, HSBC is not a good option

2. ROI is not purely decided by RBI policies but also depend of cost of funds for banks. If cost of fund for a particular bank is high then they might increase Base Rate by 0.5%-1%
3. 1% is unlikely.. 0.25%-0.5% is possible
4. It depends on cost of fund also so not necessary they will reduce but it also depend on competition. To remain competitive they keep their interest rates nearer to market leaders

rohit
rohit
10 years ago
Reply to  Nitin Bhatia

Thanks Nitin bhai… But any specific reason why HSBC is not a good option? So now if I go for Canara Bank, then your point number 2,3,4 are also all applicable to Canara or any other banks – Am I right in saying that?

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  rohit

I answered regarding HSBC in this thread. You are right but you missed point no 5 of this post i.e. communicate with your existing Home loan provider to reduce Rate of Interest. I never advise for Home Loan Transfer until unless financial benefits are huge, major Service issue or existing lender refuse to revise the interest rate. In your case as Citi Bank refused to give top up loan at same rate therefore no other choice except loan transfer.

Prasoon Agarwal
Prasoon Agarwal
10 years ago
Reply to  Nitin Bhatia

I also wanted to shift to HSBC, so any specific reason why not to go with them?

Nitin Bhatia
Nitin Bhatia
10 years ago

The legal check of small players is not upto the mark. Sometimes the loan rejected by big players on legal grounds is approved by small players for same property despite legal defect. Besides this, the service feedback from my readers is not satisfactory & moreover HSBC is a small player. It is always advisable to go ahead with big fishes who know this business very well at legal & statutory level.

All the above factors help you to take right decision

Nitin Bhatia
Nitin Bhatia
10 years ago

As your loan term is just 3 years, its not advisable to transfer the loan. You may check my post on Home Loan Transfer before taking final decision

https://www.nitinbhatia.in/home-loan/home-loan-transfer/

Prasoon Agarwal
Prasoon Agarwal
10 years ago

Hello Nitin,

First of thanks for doing a great job of informing people of pitfalls and wicked schemes of the banks…

Here is my problem, I had just purchased a resale flat and took the loan from HDFC Ltd as the original loan fro the seller was from the same and was advised me that it would be a less hassle to take the loan from them and you can shift to other banks once the whole transaction is done.

Right now ROI of HDFC is 10.75%.The other banks public and private are have a lower ROI than HDFC Ltd. So I want to shift to other banks as I think this will same me some money.I have read you article regarding the switching loan, which talks about only swtiching loans in case their is a difference of 2%. Seeing the current trend I do not think I will get this difference..

So here is my question, should I stick with HDFC or move to a public banks even if the ROI if do only save .25% of ROI. Will this help me in long run as my loan will than be regulated by Base rate rather than the RPLR rate.

I have enquired with few banks just in case id ecide to switch. Another problem I am facing is is some of the public banks like IDBI does not have the project approved in their list.However I am getting option of both HSBC and Citibank. HSBC is offering ROI of 10.25% with base rate 10% with .25% spread while Citibank is offering 10.26% foxed for three years and then at floating with .01+base rate. So should I take option of going with HSBC etc?

Thanks for your time and opinion.

Prasoon

Nitin Bhatia
Nitin Bhatia
10 years ago

I will not suggest you to transfer your Home Loan at this stage. It is not beneficial financially.

Arun
Arun
10 years ago

Hi Nitin,

You have been wonderful in helping layman like me in understanding the Financial things.

I am Arun and age is 31 years.

Straight to my question: last year I purchased a plot in Bangalore and cost was 37L plus reg cost and total amount was 41L including everything.

I took plot loan from HDFC Limited and they gave only 22L and I adjusted rest amount with Personal Loan. Fortunately, I had some other money (matured policies) from which I cleared every other loan except HDFC Loan which is 22L. I am unable to get the Income Tax Benefit for this.

Now, HDFC Ltd is very flexible with int rate and now it is 10.5 (it was 10.25 when I took the loan). And, also the loan they have given is a pure PLOT loan and I am not benefited from the income tax.

so, now I am thinking if I switch from HDFC to LICHFL (Griha Prakash) would that be beneficial to me.
I know that, HDFC wil charge 2% on outstanding but I can save some amount on the income tax from LICHFL plan.

Also, LICHFL has 10.35% fixed for 2 years as int rate. I might have to spend some amount as processing fee and also, the estimation papers.

Could you please suggest if it is worth doing a balance transfer.

Appreciate your valuable feedback.

Thanks,
Arun

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Arun

Quite unfortunate that LICHFL is not giving you right picture and deceiving customers. There are 2 type of Loans (a) Plot Loan & (b) Loan to construct on plot or purchase under-construction/resale flat.

Now you have Plot Loan which is for Land from HDFC and LICHFL is offering you Griha Prakash Loan which is for construction & purchase of property. Now there will be a clause in Loan agreement with LIC that you need to complete the construction within a period of 1 year or so.under LIC Griha Prakash loan.

Now with LIC Construction loan you will pay HDFC Plot loan but how will you complete the construction of house within 1 year (this period may vary) until unless you already have surplus funds for construction of House. .If you will not complete construction within 1 year than LICHFL might ask you to pre-close home loan.

Arun
Arun
10 years ago
Reply to  Nitin Bhatia

Thanks Nitin. Under Griha Prakash, they say within 5 years house has to be constructed. I am thinking would I be benefited by Income Tax. Please advice which one is trustworthy HDFC or LICHFL from credit point of view.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Arun

I am not sure whether you will get 5 years to construct house. Verbally LICHFL can promise you moon. Pls ask for sample agreement copy from LICHFL. Also keep in mind that if you avail loan from LICHFL than you will not get loan from any other lender for construction. You need to construct house from own funds as you will be using LICHFL loan funds to close HDFC Plot Loan. You will be servicing LICHFL loan in future.

Though its your personal matter but its my duty to sound off on future financial implication.

sunii
sunii
10 years ago

Hi Nitin,
First of I would like to thank U for such a good information.

Now below are my doubts.
I have took a home loan of 36 lac on oct, 2011 from AXIS bank for 10 years with ROI 10.75% intrest and my EMI is 50,000.
On 30-Dec-2013 I prepaid 7,50,000. Now My home loan is 25 Lac and I am planning to transfer it to SBI. My current ROI is 11.00%
SBI is offering 10.15%. Also they are having Max Gain facility, which is very helpful.
Even though you have mentioned that it’s good to transfer the home loan only if the difference is more than 2%.
But after transfering the home loan My EMI is becoming 47,000. Almost 3,000 less then current.
So, what did you mean by point 2(Transfer home loan only if the difference in ROI is more than 2%).
Please elaborate.

Also I would like to know, Should we prepay our home loan. If yes, then should we reduce term or EMI??
Many people say that its good to have a bit of Home loan (arround 15 lac) as it helps for tax saving.
Thanks,
Sunil.
Hi Nitin,
First of I would like to thank U for such a good information.
Now below are my doubts.
I have took a home loan of 36 lac on oct, 2011 from AXIS bank for 10 years with ROI 10.75% intrest and my EMI is 50,000.
On 30-Dec-2013 I prepaid 7,50,000. Now My home loan is 25 Lac and I am planning to transfer it to SBI. My current ROI is 11.00%
SBI is offering 10.15%. Also they are having Max Gain facility, which is very helpful.
Even though you have mentioned that it’s good to transfer the home loan only if the difference is more than 2%.
But after transfering the home loan My EMI is becoming 47,000. Almost 3,000 less then current.
So, what did you mean by point 2(Transfer home loan only if the difference in ROI is more than 2%).
Please elaborate.
Also I would like to know, Should we prepay our home loan. If yes, then should we reduce term or EMI??
Many people say that its good to have a bit of Home loan (arround 15 lac) as it helps for tax saving.
Thanks,
Sunil.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  sunii

Home loan transfer has certain cost attached to it i.e. you need to execute MODT again which is 0.1% of Loan Amount, Axis Bank bank will levy certain charges attached with loan closure, you need to pay Processing fees to SBI again for Home loan etc etc…Besides this it will be again hassle for almost 1 month or so. Considering all the costs attached, it is financially beneficial to transfer only if new interest rate is atleast 2% lower than existing ROI.

Also if you have gone through my comments, i never suggest Home Loan Transfer as 1st choice. If only reason for home loan transfer is lower ROI than You can reduce your interest rate with Axis Bank only by paying conversion fees.

SBI max gain is beneficial only if you have floating surplus funds.If you have surplus funds to prepay than it is advisable to prepay the loan rather keeping in SBI Maxgain account. Also note that SBI maxgain account is current account therefore you will not get any interest on amount lying in SBI maxgain which is opportunity loss.

If you are prepaying than it is advisable to reduce loan term rather EMI.

I disagree that you should continue with Home Loan just for tax saving. Consider the cost attached with Home Loan i.e. Interest Rate on Principal amount. Assuming you have 10 lac outstanding and paying 10.5% simple interest though interest on Home Loan is compounded but for simplicity purpose assume simple interest. Interest outflow is Rs 1.05 Lac during the year. Now you will save 30% tax on this amount (assuming you are in highest bracket) which is approx 20k tax saving if the property is let out after adjusting notional rent etc. So just to save tax of 20k you are paying 1.05 Lac in interest every year…Actually you are at 85k loss…If you have spare funds, pls close Home Loan asap.

sunii
sunii
10 years ago
Reply to  Nitin Bhatia

Thanks a lot for your valuable comments….
:)

jai
jai
10 years ago

Hi Nitin,

I have home loan with HDFC with 10.75 interest rate principle is 34 L.
I asked about reducing intrest rate ,they are ok to make it 10.25 but i have to pay conversion charges.
It will be near about 10k .
I don’t understand this process…they are increasing rate without notification while changing to less they are charging the conversion charges?

Instead I can transfer loan to ICICI/SBI both are offering me 10.15 rate.

But SBI has insurance attached so I m not going with SBI.
What is your opinion about paying conversion charges with HDFC or changing the home loan to ICICI?

Please suggest.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  jai

The Home loan of HDFC is linked to RPLR, which is 16.75% as of now. When they offered loan to you they fixed your spread/discount at 6% therefore your current ROI is 10.75%. Now for new customers they increased spread/discount to 6.5% thus offering ROI @ 10.25%. If they would have decreased RPLR than benefit of low interest would have been passed to existing customer also but they intentionally increased spread/discount so that low interest is available only to new customers & existing customers can reduce ROI by paying conversion fees.

If high interest rate is only concern than i would suggest you to pay conversion fees and retain your loan account with HDFC only.

Gaurav
Gaurav
10 years ago

First of all thanks a lot for such valuable suggestions and information. My Queries are :

1:If Home is registered on my Name , than can me and my dad both are eligible for Home Loan ?
2:Only after Loan approval ,Home registry process take place , or first registry than Loan approval
3:Lets suppose I need to finalize deal now but my dad would be able to come after 1 month , and we both want to take loan , so isn’t possible to do registry on my name now and loan can be taken on both names later….how to resolve this..
Thanks .

james
james
10 years ago

Hi Nitin,

I would like to transfer my home loan from HSBC, the forced interest rate has gone up in last 4 years and the EMI got increased by almost 2k. HSBC is not providing the
facility of conversion to a lower rate unlike the banks.

After approaching few banks , i realize that most of banks are 0.30% difference in ROI and processing fees. One of my friend suggests canara bank

And the insurance cover 15k. Please let me know can i transfer home loan to other banks current interest rate is 11.05 % . Looking for below 10% interest rates banks. still i have 3 years of loan term.

Thanks,

James

kamlesh
kamlesh
10 years ago

hello nitin ji,
I have home loan with HDFC with 10.25% (current rate) with 15L.
From next month my first installment is start but now I want to transfer my loan to saraswat bank. so can I transfer my home loan? please give suggest.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  kamlesh

You have not mentioned reason for transfer. I will not recommend Home Loan transfer at this stage as it will impact CIBIL score.

ananth
ananth
10 years ago

Hi,
After going thro some of the suggestions, thought to pose a question,

I have taken loan from axis bank 45 lac on july 2013, for 20 years, 44625 EMI, for a property in bangalore, now ROI is 10.65 and 253 months, tenure is raised not EMI , whenever there is raise in interest rate (ROI 10.4 , when i took loan)
they are asking 5.6k to reduce to 10.4 ROI,
Now i am thinking of BT. enquired in SBI , but they are saying min 24 months to be completed at existing bank, but i dont see that clause at there website
please suggest me which bank & what are the pros & cons or shall i pay 5.6 k to reduce ROI,
your valuable suggestions are appreciated

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  ananth

If high ROI is only concern than i would suggest you to pay conversion fees and reduce ROI. Negotiate for 10.25% ROI which they are offering to New customers now.

SBI has started de-selling their Home Loan in some cities due to heavy business. There is no clause that Home Loan cannot be transferred before 24 Month. You may complain to RBI if you wish to take them for task for the benefit of other borrowers (As a social service).

ananth
ananth
10 years ago
Reply to  Nitin Bhatia

Thank you verymuch … i will try to raise this issue

veeru
veeru
10 years ago

I took Home loan on Fixed rate of interest of 10.7 in 2012 (Fixed ROI perioed : 3 years) from LICHFL for 20 Years. Now i want that my home loan should be taken over by some other Low interest rate Bank.But as per RBI & LICHFL Guideline I have to pay 2% prepayment charges if any bank take over my home loan during Fixed ROI period while 0% prepayement charges for Floating ROI. So kindly suggest if there is any other way to transfer home loan in any of the bank with 0% of charges inspite of waiting the completion of 3 Years.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  veeru

As per RBI / NHB guidelines, Banks & HFC’s are free to charge pre-payment penalty on Fixed Interest Rate Home Loans. Unfortunately you have to shell out 2% pre-payment charges, if you transfer home loan.

Tilak
Tilak
10 years ago

have an outstanding 31lac with 10.9 floating ROI at LICHFL. Axis is offering transfer at 10.25% with 11000 fees. what do you suggest? i’m sure lichfl cannot enforce any charge for this takeover as its on floating rate

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Tilak

You may go ahead with Axis Bank.

You are right, on Home Loan you need not to pay any penalty but LIC HFL will charge other misc expense like Document Retrieval Charges of Rs 2500 + Taxes etc. Pls check following link

http://www.lichfl.com/lichousing/contentimage/tempimg/MITC%20FORMAT.pdf

AMIT ARYA
AMIT ARYA
10 years ago

Hi Nitin , i want to change my 25 lakh home loan from IDBI (10.25%) to SBI (10.15%) The tenure was for 20 years & i m still paying pre emi as the construction & loan amount disbursed are still not upto the mark to start the EMI. my home loan was started in 2012 & since then i am just paying the PRE EMI. sHHOULD I GO FOR CHANGE TO SBI.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  AMIT ARYA

As of now i don’t foresee any benefit to transfer to SBI except for 0.10% reduction in Home Loan ROI. Shifting Home Loan is as good as availing fresh Home Loan plus it comes with additional financial burden. If you are not facing any other issue with IDBI Bank, i will not suggest to transfer Home Loan at this stage.

dilip
dilip
10 years ago

Dear Sir,

I had taken Home loan from indiabulls housing finance for
14,71,757 at ROI 11.00% (for salaried). Now that its completed only 20
months of the tenure( out of 274 Months) I am gaining less benefits as
rate of interest is not difference between banks and I have expenses more.
My current outstanding balance 14
Lakh. Right now SBI have ROI 10.15%. I want to transfer my current
loan to SBI, BOB or HDFC bank due to some unhealthy experiences with indiabulls
housing finance.

I am also holding a savings account with SBI, BOB or HDFC.

Following is my questions.

·
How easy is it to get my home loan transferred
my current loan to SBI, BOB or HDFC?

·
What are the issues that I will face during this
transfer?

·
Which account with SBI, BOB or HDFC will be the
best option to have my home loan transferred and what are the pros and cons.

·
I would like to know how much will be charges
and whether it will have impact to my existing balance loan amount

·
Should I transfer my loan to SBI, BOB or HDFC? I
am hesitating because I need to pay extra 10000-15000 Rs.

·
Is there de-mortgage charges applicable when
loan is closed?

Is general home
insurance is compulsory to take from SBI, BOB or HDFC. I already have home insurance from TATA AIA life
insurance.

Please suggest me a good direction to have my EMI reduced.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  dilip

1. Home Loan Transfer is as good as applying for New Home Loan. Same process will be followed. As you have gone through same so you know It will be bit tedious process specially with PSU Banks.

2. As such there are no issues. It depends whether your documentation is complete or not. HFC like Indiabulls etc are not too strict on legal verification of property but big players like SBI, HDFC etc are quite particular. You need to check on this part

3. Please check my following post
https://www.nitinbhatia.in/home-loan/pre-home-loan-experience-with-hdfc-icici-lic-sbi-axis/

4. Different Home Loan Provider charge different Processing fees. You need to check with the respective Home Loan Provider. Standard charges like MODT etc will remain same. It will not impact existing Home Loan account

5. My Vote for SBI

6. You need to check your Home Loan Agreement or with indiabulls regarding same

7. Home Loan Insurance is not compulsory

8. You may check whether IndiaBulls can reduce your ROI by charging conversion fees.

Satish
Satish
10 years ago

Thanks a lot Nitin for your valuable information. I have become a fan of you!!

I am trying to figure out the rationale behind the 2% difference in para 2 above. Could you please put more light on how we have come on this 2% figure.

Thanks again.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Satish

Thanks for liking the site !!!

To answer your query, There are lenders like LICHFL, Indiabulls etc who don’t offer any facility to lower the ROI by paying conversion fees as the case with SBI, HDFC, ICICI Bank etc. In such cases Home Loan transfer is only option to lower the ROI. Home Loan Transfer has cost attached to it i.e. MODT charges, Processing fees etc. Home Loan transfer is financially beneficial for borrower if the Rate of Interest with new lender is lower by atleast 2% from existing Rate of Interest else it is not beneficial to transfer Home Loan.

Satish
Satish
10 years ago
Reply to  Nitin Bhatia

Thanks Nitin!!

Hardik P Bhavsar Bhavsar
Hardik P Bhavsar Bhavsar
10 years ago

Dear Nitinbhai,
I have taken homeloan from BOB in Jan 2010 for 21 lakhs for 25 years period. Present, outstanding is 19.25 lakhs. I want to transfer my homeloan to SBI maxgain having interest of 10.15% to take the benfit of maxgain scheme so that I can pay principle amount indirectly by keeping my surplus in maxgain account. Is really worth to transfer the homeloan to SBI maxgain scheme.
Please help

Nitin Bhatia
Nitin Bhatia
10 years ago

If you have surplus funds to maintain in SBI Maxgain account than only it is beneficial. You may seed your Maxgain Account with contingency fund to lower Home Loan interest outflow.

Hardik P Bhavsar Bhavsar
Hardik P Bhavsar Bhavsar
10 years ago
Reply to  Nitin Bhatia

thank you sir

gouri sundar
gouri sundar
10 years ago

hi nitin sir.. i have home loan of 33 lacs for 25 yrs in hsbc bank.. i wants to transfer my loan a/c to hdfc bank.. and i want top up loan also.. but hdfc people are telling that due to bank,s rules they cant transfer any loan from hsbc.. i need your suggestions on this sir..

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  gouri sundar

HDFC Bank does not provide Home Loan. You must be following up with HDFC Ltd. HDFC Ltd is different entity from HDFC Bank. There is no rule that HSBC Home Loan cannot be transferred to HDFC Ltd. You may ask HDFC Ltd to clarify in writing i.e. Why Home Loan from HSBC Bank cannot be transferred to HDFC Ltd.

gouri sundar
gouri sundar
10 years ago
Reply to  Nitin Bhatia

dear sir.. it was HDFC BANK LTD.. their exact words on mail is– ” Thanks for showing interest in HDFC
home loan, but we regret to inform you that as per the HDFC POLICY
norm we will not be able to transfer the HSBC LOAN”.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  gouri sundar

As i mentioned HDFC Bank Ltd does not provide Home Loans. You should apply with HDFC LTD. HDFC Bank and HDFC Ltd are 2 different financial institutions. The HDFC Ltd website is http://www.hdfc.com

gouri sundar
gouri sundar
10 years ago
Reply to  Nitin Bhatia

Thank you sir..

Dhirendra
Dhirendra
10 years ago

Hi Nitin,
Thanks for such a wonderful blog.
I’ve a query…I have taken Housing Loan from RHFL (Repco Bank Ltd.)….now I want to transfer it to SBI. I need a list of banks those are authorized by SBI for loan transfer. Can you please help me here

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Dhirendra

If you have all the property documents in place then SBI cannot refuse Home Loan/Transfer. There is no such authorized list of banks for Home Loan Transfer maintained by SBI or any other bank.

Amjad
Amjad
10 years ago

Hi Mr Nitin,
I had taken a Smart home loan with HSBC in 2006 for around 36Lakhs tenure 25Years, the initial interest rate was 9.75% with time it increased many time and on my request they reduced the interest rate 2-3 times without any extra charges as i had requested to opt for transfer of loan. They reduced the interest rate by saying that i am keeping extra amount in my smart home loan account.
Now when i called up the customer care of HSBC to check the interest rate, it is 12.15%.
i was planning to transfer the loan to SBI as they are offering 10.15% interst rate with there MAX gain account.
Just want your good suggestion to again request them to reduce the interest rate or transfer the home loan with SBI.
My present home loan is with an insurance cover also, they had a group cover with TATA AIG.
And if i tranfer the home loan to SBI is the same insurance cover can be used with SBI.
Thanks
Regards

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Amjad

You can pay conversion fees to reduce ROI. I am sure HSBC will agree for same. Home Loan transfer should be last option as its a big hassle. In my opinion, you should 1st try to reduce ROI with HSBC only. If they refuse then you can transfer to SBI.

If you transfer your Home Loan then your Home Loan Protection Plan or Home Loan Insurance cover will lapse. It cannot be transferred along with Home Loan Transfer.

Amjad
Amjad
10 years ago
Reply to  Nitin Bhatia

Thanks Mr Nitin for your valuable suggestion.
as per my earlier comment i had requested HSBC for foreclosure letter and the reason being the interest rate. Today i had rcvd a call from HSBC home loan dept saying they will revise my interest rate but with a processing fees of 0.5% of outstanding of my home loan.
presently i have and outstanding of abt 25Lakhs, so the processing fees will be about 12500-13000Rs. Just wanted to ask you is it worth to pay the processing fees and revise the interest rate.
Also my interest rate system is as per BPLR should i switch over to base rate system after getting my revised interest rate.
Is this base rate system is benificial as there is no processing fees for switchover from BPLR to Base rate.
Thanks
Best Regards

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Amjad

As i always mention that Base Rate system is more transparent and scientific method of fixing rate of interest for Home Loan therefore as a 1st step you can give a written request to bank to link your Home Loan with the Base Rate of bank instead of BPLR. There is no fees for this shift and you can give request on plain paper. Don’t forget to take acknowledgement of your request from bank executive.

After your Home Loan is linked to Base Rate, you will receive letter from bank regarding the same. As a 2nd step, you can pay conversion fees and reduce the spread over base rate linked Home Loan. It will be financially beneficial to reduce ROI by paying conversion fees as your current ROI is very high.

Varin
Varin
10 years ago

I have taken home loan from ICICI in Feb’2011 and submitted documents like Sale deed agreement, payment receipts and Construction agreement papers. The Flat which I booked in 2011 was with the name as e.g. ABC and now this property’s name is changed to XYz due to following reasons- Old builder have now more partner to this property. In this case what is the process to swap the Old documents with the new set to document. I checked with bank they says I need to apply a fresh loan again. Could you please provide me your valuable inputs on this.

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Varin

If old builder has sold property to you then he cannot bring new partners for flats already sold. You need to check deal between old builder and new partners. If he has included already sold inventory in the deal the its a fraud and old builder cannot do this. You must have already made some payment to old builder. How this payment will be accounted? and how the disbursement from bank till date will be settled? You need to find out answers

From Home Loan perspective, i agree with bank. If you are changing the builder as party to transaction then you need to apply for fresh home loan. It is not feasible in existing Home Loan

Vinni
Vinni
10 years ago

Hi Nitin,

your blog posts are really helpful and eye-opening.

I am looking for some advice on my home loan. I have a SBI max-gain account where I am paying EMI of 33K @ 11.75% rate of interest. The initial loan amount was 39L started in 2011 for 25 Years of tenure. Being a max-gain account, we have managed to deposit around Rupees 10L (additional in overdraft account).

current roi of SBI for new customers is 10.5%. If I apply for a rate correction, will they calculate the outstanding amount only based on the loan amount – principal paid in EMI? or Will they consider my deposited amount in max gain as well?

Nitin Bhatia
Nitin Bhatia
10 years ago
Reply to  Vinni

In case of this SBI Max Gain, Actual outstanding Home Loan amount is called as Drawing Power (DP) not the outstanding amount. You conversion fees will be calculated based on Drawing Power.

Leo
Leo
9 years ago

Hi Nitin,
I think you could advise with my current situation. I am currently holding an NRI home loan account with DHFL started in 2011 since then in the beginning of the year I was paying the PEMI after which I was advised by an outsource and consulted DHFL to start the EMI and since then I have been paying a fixed EMI of 19K @ current interest of 11.60% which initially started @ 9.25%. My loan period is for 15 years but now as I see the no. of months keep adding up and the principal outstanding amount too has only been 50K less from my actual loan amount of 18L. This really seems too long and I do not know how long this would continue and if it is with every home loan account but I just feel to paniced of the increasing tenure which was initially 15 yrs and has now increased to 6 more years.
Kindly advise what is the best thing to do.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Leo

It seems your Home loan was under teaser scheme and now the interest rate has increased. You speak to DHFL and request them to reduce ROI by paying conversion fees. Your ROI after paying conversion fees should be in the range of 10.25%. In all probability DHFL will not agree for same then you may shift your Home Loan to some bank like SBI, ICICI or Axis Bank. Banks fix interest rates in more transparent way compared to HFC.

Leo
Leo
9 years ago
Reply to  Nitin Bhatia

Thanks Nitin for the advise. I hope DHFL comes to a settlement if not then I would opt for an alternate bank as youve mentioned.
Really Appreciate your asisstance.

Aashray
Aashray
9 years ago

Hi Nitin,I have an existing Home loan with DHFL. Disbursed in May-2013
– 27,50,000 for 20 years @ 10.75% EMI 28,480.

As on date interest rate is 11.35%. Till date I have paid principal only – 39,491
and Interest – 3,59,234.

Biggest joke is with the increased rate of interest they
have increased my tenure as well. As on date it shows balance period of 248
months (original tenure 240 months out of which 14 months completed)

I was working on Home Loan transfer calculation to ICICI
which is offering me 10.15%.

On my current outstanding 27, 00,000 @ 10.15 % for just 15
years I’ll be paying just 995 more from current EMI. (New EMI 29,475 approx)

Important thing is I’ll be saving 5 years (compare to
original tenure) 7 years (as per increased tenure interest rate hike)

Interest Difference is just 1.20%.

Question 1 – Would you advice the Switch over?

Also being privilege banking customer they charging
processing fees just 0.25%+ plus rest mandatory charges MOD, etc.

I’m planning to take top up loan from ICICI along with Home
Loan. Which that executive said is offering at 10.25%. (It’s tempting and hard
to believe). As per there calculation I’m eligible to get 5.5 lakhs

My dad has mortgage loan on his house of 4.25 Lakhs @
current rate of interest 16% (original amount was 5 lakhs 2 years back).

Question 2 – Can I use the TOP up loan amount to pay Dads
mortgage loan?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Aashray

1. It is advisable to switch to ICICI Bank as it is financially beneficial
2. You may clear your father’s outstanding loan but i doubt top up loan is available at 10.25%. Please cross check.

Rohit Parab
Rohit Parab
9 years ago

Hi Nitin Sir,

i have taken home loan from DHFL bank in november 2012 of Rs.12 lac, and paying emi of Rs.12437/- per month, interest rate was 11.25 that time and now it is11.60% when i check the outstanding emi it was showing 242 emi as on date (original tenure 240 emi) after paying 21 EMI due to change in Interest rate.

SO i m thnkng to transfer my home loan to PNB Housing finance coz they are offering 10.75% interest rate which will be fixed for 10 years. so please advice.

also DHFL has insured my home with ICICI bank, as per PNB this insurance will lapse, so will i get refund of insurance premium from ICICI bank ?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Rohit Parab

You may transfer your Home Loan to PNBHFL. You will not get refund of insurance premium paid to ICICI Bank.

harshad mandlecha
harshad mandlecha
9 years ago

I have a home loan with Shree Sharada Sahakari bank. Though it is a co-operative bank, it has been a superb player and with 05 NPA for last 7 years. I need suggestions which bank will allow a home loan transfer and top up too. My loan outstanding is 11.5 lacs and property valuation is 70 lacs.

Nitin Bhatia
Nitin Bhatia
9 years ago

No bank can refuse Home Loan Transfer provided title of property is clear and you are eligible for same. You may approach SBI, ICICI Bank, Axis Bank or Bank of Baroda for Home Loan Transfer.

Mohan Babu
Mohan Babu
9 years ago

Hi, This is Mohan from Bangalore. I have taken Site loan from DHFL. They have offered me @12.6% interest by saying lack of some document from Site. But the same bank of other branch offered @ 10.8% interest to other beneficiary in the same layout. Here other beneficiary has submitted the same documents. I have raised my concern to DHFL customer care. But couldn’t get proper response.

Pls suggest me what can I do in this case.

Thank u.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Mohan Babu

If all the documents are not available then risk associated with loan increase and Banks / HFC lend at higher rate. I suggest you to arrange all the documents required by DHFL and then apply for loan.

Uday
Uday
9 years ago

Hi Nitin,
I have a floating rate home loan of 27 Lakhs @ 10.25% in HDFC bank taken in the month of January 2014. Paid around 8 EMIs around 32,699 per month. I am planning to Transfer my loan to SBI at 10.15% and to avail the Max gain facility? Do you suggest me to go ahead with transfer?

Is Insurance mandatory for SBI home loan?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Uday

If you have unutilized funds to maintain in maxgain account or would like to keep contingency fund in maxgain account then only it is beneficial otherwise, i will not suggest to transfer because of 0.10% difference in ROI.

Home Loan Insurance is not mandatory

Uday
Uday
9 years ago
Reply to  Nitin Bhatia

Thanks Nitin

ravi
ravi
9 years ago

Hi Nitin,
i hv a question regarding my home loan….i took home loan from icici @7.75 percent in 2004….it was a floating rate loan with fixed emi of 8945 and was supposed to over in 2014 ..the mistake i did i was nvr checked the emi paid becoz of my bsy work schedule nor i got any letters from bank during all these years…now in 2014 i got my loan whole statement frm bank and was shocked to see they were charging 16.75 percent on my loan…the loan amount was 756000 and i have already paid 11 lakhs till now…the problem is they still saying that my loan period is still left till 2020 and another 6.5lakh i hv to pay including interest till that period which i guess again will increase again if left such till 2020….the loan was for building new house on my property….i m thinking of going to consumer court abt this..so plz tell will this work or tell me another possible solution if any…i already contacted bank they told me to pay 3500 and then they will reduce my interest rate to 10.5….so it means they were doing fraud with me till now….?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  ravi

Home Loan is governed by Home Loan agreement and unfortunately nothing can be done in your case even if you approach consumer court. I suggest you to pay conversion fees of Rs 3500 and reduce your ROI or you may transfer to SBI or Bank of Baroda.

ravi
ravi
9 years ago
Reply to  Nitin Bhatia

Thnks nitin for ur timely reply…i will surely look abt this option :)

abhay
abhay
9 years ago
Reply to  ravi

Dear Mr. Ravi ,
I discusssed this conversion scheme with my loan provider to have reduce interest i.e.10.5 % than exisiting ROI i.e. 12.5 %. But their is no benifit when I took projected statement of my EMI. The reduced ROI scheme increased the tenure more than 5yrs and I have to pay more amount of Interest. Hence my suggestion is to go for pre payment option and pay regularly some extra amount that will get reduce directlly from your capital and reduce your tenure.
Abhay Jadhav

Parikshit
Parikshit
9 years ago

Hi Nitin,

I am having home loan from Axis bank and my current outstanding principle amount is 19,16,679/- and i am paying pre EMI right now with ROI of 10.25,
So advise me if i should go for SBI transfer or not ?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Parikshit

I will not suggest. Current Base Rate of Axis Bank is 10.25% and your loan is linked to base rate with 0% mark up therefore you will gain most when interest rates will increase.

sunny
sunny
9 years ago

Hello Nitin,
I have a home loan with repayment balance of 143000. I have paid 20200/month with 111months pending and my interest rate is 10.5% unchanged since loan disbursal since January now.
Upon reading comments below i understand DHFL will vary our interest rate very frequently. My doubt is:
1) How frequently and on what factors this bank changes interest rate.
2) With the available balance, can we guess that interest rate will be increased or any fluctuations expected.
3) Will bank consider for any interest hike if I prepay some amount.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  sunny

1. If Home Loan is under any teaser scheme but is fixed for initial period then it will not change till committment period is over else as and when DHFL will revise BPLR/RPLR your ROI will change.
2. No. There is no co-relation
3. No. There is no co-relation

Manish Ghadiyali
Manish Ghadiyali
9 years ago

hi sir
I have taken loan from Indiabulls in april 14 at Rate 10.15% EMI 27329/– but they increase rate to 10.75% without informing me and increase my Tenture form 240 to 280. NOw HDFC offering me at rate 10.15% and 216 nos EMI 28266/– so please guide me i want to change from indiabulls to HDFC it is benificial me or not please.
manish ghadiyali

Nitin Bhatia
Nitin Bhatia
9 years ago

You may transfer to any bank like SBI, ICICI Bank or Axis Bank.

Nitin
Nitin
9 years ago

Hi Nitin,

I have taken a home loan from AXIS bank for a resale property @ 10.25% in this month only. And 2 days back I have got a call from HDFC bank, that your number is selected in lucky draw and they are giving home loan @ 8.5%. Could you advise me, should I go ahead for the loan transfer to HDFC and how do I check the genuineness of this offer.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Nitin

These are fraudulent calls just ignore. Axis bank has revised Base Rate from 10.25% to 10.15% therefore your ROI will reduce to 10.15% in next reset cycle.

gnr
gnr
9 years ago

Hello Nitin, I have a loan of 26 lacs from ICICI with ROI currently 10.75. It started in Nov 2012 originally with a tenure of 20 years and recently I changed the tenure to 10 years as my repayment capacity was improved. The EMI went up from ~26,700/- to ~35,600/- in the process.

Now I have an offer from HDFC for ROI of 10.15 and I believe I should be able to get a tenure of same 10 years. Is it advisable for me to go for this transfer? I’m quite sure they will waive off all processing fees (that will be my precondition anyway) but may have to pay the statutory fees as you mentioned in your article.

What I need to really understand is, if the loan is transferred with whatever amount+tenure remains with the older bank, does the amortization schedule look similar with the new bank? Or does the new bank try to make some extra money for the new entrant? How does the interest calculation algorithm of HDFC compare with that of ICICI?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  gnr

Amortization schedule will depend on ROI & Rest (Daily/Monthly/Annual). As you are getting lower ROI therefore if EMI remains same then your Home Loan tenure will reduce with HDFC because “principal” contribution will increase and “interest” component will decrease in monthly EMI provided Rest is “Monthly” in both the cases

Interest calculation algorithm is same for particular rest type i.e. for monthly rest, interest calculation will be same for all home loan providers.

In my personal opinion, you should pay conversion fees and reduce your ROI with ICICI Bank instead of transferring Home Loan.

Nitin Bhatia
Nitin Bhatia
9 years ago

Unfortunately no other bank will takeover Home Loan declared as NPA. You may request SBT to re-structure the Home Loan.

Tirumala SatishKumar Voleti
Tirumala SatishKumar Voleti
9 years ago

Hi Nitin, I took home loan of 21 lacs from AXIS bank in 2008. Even though the interest rate changed i am ok with the loan. In the last 5 years i part paid 12 lacs apart from the regular EMI as AXIS does not charge fine for part payment. Now actually i need amount for my personal needs which i did not plan for. May be my wrong for part payment. I went to bank and asked for any more disbursement which i already paid. They are not willing to give any extra money. Now my question is, could i transfer my loan to other banks/institutions like tata capital/DHFL, etc.. and could i get 15 lacs out of which 9 would go to AXIS and remaining 6 would be paid to me. Is this possible? if so which bank is better?

Nitin Bhatia
Nitin Bhatia
9 years ago

Unfortunately, it is not feasible. You can avail Home Improvement loan.

Yudhvir Singh Chauhan
Yudhvir Singh Chauhan
9 years ago

Hello Nitin ji, I took a loan of Rs.17 lac from pnbhfl in 2010 and am paying Rs.21000/- EMI. The present ROI is 10.75%. At present an amount of Rs.14 lac is outstanding towards home loan. I intend to take home improvement loan of Rs, 10 lac. I got an offer from LIC Housing that they would take over the existing loan and also give home improvement loan of Rs,10 lac at ROI 10.10% for two years. Should I transfer my existing loan to LIC housing? Pl. guide me.

Nitin Bhatia
Nitin Bhatia
9 years ago

I will not recommend. You may consider SBI, ICICI Bank or Axis bank.

Suresh Gopalan
Suresh Gopalan
9 years ago

Hi Nitin
I have taken loan from LICHFL towards purchase of flat in Bangalore. The current rate of interest is 10.95% fixed for 10 years and the balance 10 years, floating rate of interest. I feel the rate of interest is quite high. I am looking at other options like HDFC,IDBI. SBI will give home loan for flats that have A Khata certificate. The flat i am residing has B Khata certificate. This being the case, SBI is ruled out. I have to find out from the other 2 banks if they issue home loan for flats with B Khata certificate.
Assuming both the banks give home loan, is it feasible for me to change the loan from LICHFL to say HDFC/IDBI. HDFC is giving loan at 10.15% while IDBI is giving at 10.25%.
Need your feedback on this. My current EMI is Rs 27256/month. The loan amount is Rs 26 Lakhs

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Suresh Gopalan

Earlier only PSU banks were not sanctioning Home loan for Khata B property in Bangalore but as latest information now it is not feasible to avail Home Loan even from Private Banks like ICICI bank, Axis Bank etc and from HFC like HDFC on Khata B Property. You may check and if bank agree you may transfer home loan to IDBI bank or HDFC.

Shankar Parab
Shankar Parab
9 years ago

Hi Nitin,
I have a Home loan with Apna Co-op bank, Mumbai at 12% fixed ROI, which was disbursed in Feb 2011. Due to some personal reasons I need extra funds and I have approached HDFC Ltd for this home loan transfer. They are proposing to sanction transfer of 14 Lakhs o/s principle and give top up of 9 lakhs both at ROI 10.15 % floating. I have two questions below.
1) Is this transfer beneficial with HDFC or should I look for other banks? (SBI rejected saying they dont take over Co-op bank’s home loan)
2) I just read above that new lender may waive of processing cost? is it only banks or HFC’s also practice it?
Regards
Shankar

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Shankar Parab

1. As you rightly mentioned that banks or HFC’s don’t take over Home Loans of Co-operative banks. As i understand, you need additional funds therefore you are planning to switch. In this case, you may approach private banks to check feasibility of transfer.
2. Waiving off processing fees is marketing gimmick. They will charge this fees under some other head like administrative charges, legal charges etc.

Rohit
Rohit
9 years ago

Hi Nitin,
I have taken home loan of Rs 17 Lakhs from IDBI bank, Delhi at 9.5% ROI, in Dec 2010 . My current ROI is 10.50% and current outstanding balance is 14.5 Lakhs. Now SBI is also offering me 10.15% with no Processing fee.

1. Should i transfer my Home loan to SBI?

Also i have home loan insurance from IDBI bank for which i paid one time premium of Rs 32000/- at the time of loan disbursement.

2. Will IDBI return this loan insurance amount ?

As per SBI, there is IRDA guideline for returning loan insurance amount in case of balance transfer or foreclosure.

Regards
Rohit

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Rohit

1. I will not suggest Home Loan transfer. You can reduce your ROI to 10.25% with IDBI bank by paying conversion fees.
2. You need to check Terms and Conditions in your policy. Normally it is non-refundable.

shaival
shaival
9 years ago

Hi Nitin

I have a home loan of about 35 lacs from LICHFL taken for buying a flat in the year 2013 @ 10.00 fixed for two years and floating after two years. My loan tenure is 18 years.

From May 2015 floating interest rate will be applicable and I wanted to know what is the LICFHL’s prevailing floating rate.

Do you suggest transferring my home loan to any other bank which will help in lower EMIs? If yes then which bank should I be considering and what is the procedure to do so?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  shaival

Current LHPLR of LICHFL is 14.5% and spread offered is 2.5% therefore in all probability your ROI will be 12%. You may transfer to SBI / ICICI Bank / Axis Bank.

shaival
shaival
9 years ago
Reply to  Nitin Bhatia

Thanks for the update.

if i continue with LICHFL i will have ROI 12% then i guess it is increase by 2%.

In my flat first owner is my mom(senior citizen woman) and i am second owner,
Which bank should i prefer for home loan transfer ? to avail the senior citizen woman discount.

Thanks
Shaival

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  shaival

SBI and ICICI bank offer 0.05% rebate on interest rate, if loan is availed by a Female. There are no separate concessions for senior citizens.

praveen
praveen
9 years ago

Hi Nitin,

I had applied for axis bank composite loan, it has been approved and also received loan saction letter. Due to shortage of time i had to go with axis bank even i though i would have got it in SBI. Loan amount is 70 lakhs, floating ROI is 10.15% for 20 years. I have few questions :

1. I will get the loan disbursed for 36 lakhs to buy the plot and im not sure whether i will go ahead with construction or not. But as per the bank i have to start construction before 18 months, what would be consequence if im not starting the construction.?
2. Will the bank be forcing me to take the entire loan amount within 18 months..?
3. Is it advisable to takeover the loan to SBI from axis . SBI is offering 10.05 for women applicant (i can apply in my wife’s name).
4. My loan sanction amount is 70 lakhs but the availed amount is 36 lakhs, so is my takeover loan will be considered for 70lakhs or for 36 lakhs.?
5. Axis bank told that there is no preclosure charges, is this applicable in case of takeover.?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  praveen

1. Normally if construction is not started within stipulated time then bank exercise either of following option. You may check Loan agreement for more details.
(a) Recall the loan and borrower has to clear the composite loan immediately(b) Levy penal interest which is normally 2% more than applicable rate of interest e.g. if your ROI after 2 years is 12% and construction has not started then ROI will be increased to 14%.

2. Yes, it is possible
3. You may check terms and conditions of SBI
4. 36 Lakhs
5. Yes but only for loans linked to floating interest rate

Ram
Ram
9 years ago

Hi Nitin,
I had bought a property for about 75 lakh and the loan was from Lichfl. The registration of the property was done at guidance value which was about 30 lakh. The current outstanding amount is about 60 lakh. I am thinking of transferring to SBI max gain loan now. I have immensely benefited from the overdraft facility that this provides.

My questions for you is
1. Will SBI fund this loan based on valuation (which will be at least 80 lakh) or will it fund only based on registration value. If it is the latter, I don’t have an option but to continue with LICHFL. Are there other banks that do funding on valuation?
2. Would you recommend similar options from IDBI or HSBC or SCB that provide loans similar to max gain?

Shall await your response.

Thanks & regards,
Ramki.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Ram

1. SBI will fund based on market valuation of the property.
2. You may opt for other lenders but please check Rate of Interest. ROI of such products is slightly high compared to regular floating interest rate offered by the bank.

Ram
Ram
9 years ago
Reply to  Nitin Bhatia

Nitin, thanks for the prompt response and the clarifications.

Though I would prefer SBI, would like to keep a backup. Which of the other three – IDBI, HSBC, SCB that offer a similar loan though at about 20 bps higher than the normal loan, would you recommend?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Ram

IDBI

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