Does Home Loan Transfer Help Financially? Home Loan Blog - Tata Capital

Should you Transfer your Home Loan from One Bank to Another

May 23, 2017

If you are a borrower, you couldn’t have asked for anything more. Interest rates are falling like anything. Under control inflation and demonetization have created a platform for lenders to cut rates further.

So when trustworthy and dynamic new lenders are offering you to transfer your existing home loan at lower rates, does it make sense to take the offer?

You might feel that a reduction of 0.5 0r 1% is not significant. After all, how much of an impact this will have on your EMIs?

But that is not true. Even a small reduction in home loan interest rates can save you lacs of rupees in long term.

Suppose you have a home loan with outstanding amount of Rs 30 lac on which you are paying 9.75% interest. But there is another offer that you have from Tata Capital for a loan at 9%. What should you do? Should you take the switch? Or should you stay with your existing lender?

One thing to note here is that only considering reduction in EMI won’t be enough. You need to consider expenses like pre closure penalty, processing fees for new loan, etc. too.

A simple calculation shows that shifting to a 9% loan will save your about Rs 4 to 7 lacs over the course of loan. So this switch actually makes sense, even if you consider the extra charges levied by existing as well as new lender. Why should not you save some serious money when that is easily possible, Isn’t it?

So take advantage of the current low-rate regime. Chances are high that rates might fall further. So be on a look out and get in touch with people at Tata Capital. You are sure to find a home loan transfer option that will save you a lot of money.