Understanding Home Loans Balance Transfer in India

Does your Home loan providing bank or lender is charging you more interest rates than what others are offering? Opt for shifting your home loan to another lender by taking advantage of lower interest rates on home loans from other lenders. 

Do a thorough market research of new home loan transfer options. Interest rates usually differ after a fixed amount of loan amount such as 25-30 lakhs. But there are various points you should remember while transferring your housing loan to other banks or lenders.

• Tenure Reduction: tenure refers to the time loan for which loan has been approved. Keep in mind, after shifting your Home loan to another lender, your existing home loan tenure should be decreased, so that you can pay off loans faster. Let the EMI’s be same.
• EMI Reduction: If you are not opting for tenure reduction, you should go for EMI reduction. In this, your monthly or quarterly EMI amount should be lower than what you were paying earlier. 
• Prepayment Charges: Since there are two types of interest rates applicable, fixed and floating. Floating interest rates home loans can be easily transferred to another lender without any prepayment charges. It cannot be true in case of fixed interest rates. A prepayment fee. A substantial amount of pre payment charges in shifting a loan may cost you even more than previous one.
• Conversion Fee: Conversion fee is charged by your present bank or lender for converting your home loan interest rates to some lower one. It’s usually same as pre-payment charges. If you find it suitable, stick to the same lender with reduced interest rates on home loans.

Always, take in consideration, all costs and benefits while transferring your Home Loan to some other lenders. There are various private lenders who offers low interest rates on home loans than banks, and they are even more than trustworthy too. There are many such private companies such as Deals of Loan, which offers as low as 10.25% on home loans.

Beware of "cheap" Personal Loans offers from Banks

          The next time your bank calls you and asks you for offering cheap Personal Loans, give it a second thought. The banks now-a-days have researched various things about you from your Personal account details and hence offer you loans that they say as "cheap". Pay strict attention to the details of the pre-processing and the pre-payment charges that are included for verification, stamp duty charges for legal agreements and other things.

          Generally, while offering you cheap Personal Loans, interest rates offered by banks may be less than available in market, but that is been compensate when you close the lead by not paying attention to pre-processing fees they would take. Banks do not slash their rates, they just increase the processing fee and pre-payment charges in exchange of giving cheap rates for Mortgage Loans.

           Generally banks in India offers Personal Loans at an interest rates of 12.99% up to 25% and often offers discounts on interest rates, but the catch is the same scheme is not available to all the borrowers and can be withdraw anytime without prior notice. Banks also want to increase their share of retail loans, hence they offer such schemes.

        The borrowers have to keep in mind that Personal Loans interest rates are fixed for the time period you have taken loan, and any changes to the RBI rules for interest rates does not affect and  change borrowers interest rates that he has filed for.

           Hence, you should always read all the documents clearly, analyze the difference in interest rates such as what are normal interest rates and what are being offered after discounted prices, understand the processing fee charges and see how much they are taking. You should always consult a Personal Loan consultant before getting such types of Loans.

            When things are crystal clear, you will not be any problem and won’t end up paying Personal Loans higher than what you expected.

Improve your Credit Score to avail Personal and Mortgage Loans

Due to lack of awareness, we often don’t pay any attention on our credit accounts while making transactions. The most prominent reasons to have a low credit scores are:

• ·         High Credit Card Balance

• ·         Too many credit accounts linked to your name

• ·         Payments not made on time.

• ·         Current Loans you have, if any.

• ·         Your previous payment history.

In India, there is a separate organization that deals with collecting and maintaining every individual Credit account records known as CIBIL Scores. The Credit Score is taken into account when you want to apply for Credit Cards or Personal Loans. If your score is higher than the prescribed one, you won’t have any problem getting Loans or credit Cards, but if it’s less, you may have a problem.

Here are some ways you could improve your CIBIL score:

1.        Know your weak areas and Improve: Now that you have known about the points that can get you a low credit score, you can improve in those targeted areas.
2.         Paying your Loan Interest on time: Never fail to pay your mortgage loan or personal loan EMI, so that it won’t affect your Credit Score so severely.
    3. Have one credit card: Don’t try to use multiple credit cards, for if your account balance differentiates hugely, you will be in a trouble.

Therefore, it’s important to opt for low interest rates Mortgage Loan, whenever you are in a need. If you have a good credit history, loan providers may offer you best deals on Loan against Property with low processing fees, since your ability to repay will be shown in your credit score report.