I want to transfer my home loan from a housing finance company to a nationalised bank. What is the procedure?
—Siraj Bhalla You can definitely transfer your home loan to a nationalised bank based on your repayment track record. There are two major charges that need to be taken into account while transferring the loan. The first one is the prepayment charge (at present payable only on fixed rate loans and on dual rate loans during the fixed rate tenure of the loan) that you will have to pay to your existing lender for prepayment of your loan and thus closing your loan account. If your loan is on floating rate of interest, the banks cannot levy this and, therefore, you need not worry about the prepayment charges. The second one is processing fees, which you will have to pay to the bank, where you will transfer your loan. For a loan of ₹ 75 lakh, the bank you mentioned offers you 10.15% rate on home loan and the processing free for balance transfer is only ₹ 1,124/- (including ST)
In addition to the cost as discussed above transfer of loan from one lender to another also involves the modalities of handing over the property documents from your existing housing finance company to the nationalised bank. The existing lender typically provides a letter addressed to the new lender providing a list of original documents available with them as a security with an undertaking to release the documents within a certain number of days after full payment is received. The letter will also contain an amount on payment of which the loan will be treated as fully paid off. For availing loan from the new lender, you should have a track record of payment of your EMIs in time to be able to get an offer from another bank to take over your existing loan at better rate of returns.
Check with existing lender itself whether they are willing to drop the rate for you on payment of a small fee, which will save you a lot of hassles
I need a detailed comparison between SBI Yuva and SBI Maxgain. Where should I park my surplus money to avail less interest?
—Suraksha Shah Primarily, SBI Yuva Home loan provides 20% higher loan amount than that of a normal home loan. This is for salaried employees only between the age group of 21 to 45 years with a net monthly income of ₹ 30,000.
For the first home loan scheme, the borrower pays just the interest component on the home loan for the first 36 months and the regular EMIs start after the end of 36 months. The loan amount eligibility for the second scheme is similar to their regular home loan eligibility. The minimum loan amount you get is ₹ 5 lakh and the bank charges a premium of 0.25% over and above the applicable home loan interest rate for a loan greater than ₹ 1 crore.You can use both your temporary and permanent surplus funds and thereby reduce your interest costs to the extent of the surplus funds deposited in the account and at the same time retain the flexibility of withdrawing the surplus for other uses as and when you may require. Every month when the loan installment is paid, interest at the applicable rate is calculated on the aggregate principal outstanding after taking into account the balance, if any, in the linked current account. Putting money in the linked current account is as good as temporary prepayment.
Harsh Roongta is CEO, Apna Paisa. He can be reached at email@example.com