Home Loan balance Transfer
Initiated the process to shift my uncle's home loan from Axis to Bank of Baroda's "Takeover scheme" loan.
Current ROI at Axis - 9.05
Best deal provided from retention team - 8.75
ROI offered by BoB's - 8.50
_____________________________________
Documents to be submitted at BOB:
- last two year ITRs,KYC of applicant/co-applicant
- property document copies(general)
- Account statements #
- List of Documents (LOD) #
# this two documents should come from original lender. For Axis, we have to visit the Loan department, and have to request the same. Account statement comes instantly in mail, LOD comes over courier to registered address.
_________________________________________________________________
Axis Retention:
LOD is usually asked for outstanding transfer. I was told by agent to request the LOD, as it's being end of fiscal, they'll cut some stack to retain me. However, the person at desk received my document request without any bother. So, I asked her if they usually let go customers that easily without any retention.
Then she asked me if I would like to hear back from retention team, and she took another request for callback from retention team. She entered the name of competitor and offered ROI.
Under 3 working days, my uncle started receiving calls. and upon third day of daily calls, he heard the best of them as 8.75. he denied and asked the LOD explicitly. It was matter of yesterday, let's see if he still gets' another call today.
_________________________________________________________________
Pre-closure charges from AXIS:
My agent from AXIS said there would be no pre-clause charges to issue the NOC.
only the charges of LOD that gets delivered to my address.
__________________________________________________________________
Some important terms of BOB offer :
- As per the manager, minimum amount transfer amount is 30L. our current outstanding is 27L. so he insisted to take a top-up, as we're not looking for any top-up be agreed to make his best possible to offer the loan of 27L. In nutshell, they'll easily provide the top-up if someone asks.
- Offer is till end of fiscal(as per manager), so better visit the branch early if interested. __________________________________________________________________
key benefits :
- Zero processing charges
- Old insurance will work
- Zero cost for valuation report(Manager agreed to reimburse)
-
Any credit amount kept in SB will make the Interest 0 of the same amount on loan outstandings
counted daily; have to let go savings account interest(2.75)
For example,
Outstanding = 27L , SA balance = 3L then
24L @ 8.5%
3L @ 2.75%
Makes the average at 7.86% per annum if I maintained the 3L SA for 365 days. daily pro-rata basis, otherwise.
_________________________________________________________________
- Groups
-
Finance
Do we need to visit the branch for requesting the same?
Please consider the processing charges, demortgage charges, mortgage charges and other charges before opting for balance transfer. Sometimes, it's better to negotiate with existing lender for lower interest rate. Some provide options of conversion where the rate is reduced after paying some fees, e.g. HDFC Ltd. I have 8.8% at present and HDFC can lower it to 8.6% after conversion. But I am waiting for better offers from HDFC. Last time they lowered the rate from 8.95 to 8.55.
Any amount to be paid for conversion?
Banks charge fee for lowering interest rate too
Anyone wants balance transfer of home loan to Bank of Baroda at Surat. Please dm me your contact no.
P.s. Min ticket size is Rs30 lakhs
Here are my 2cents to discussion :
Nothing against or for to the OP. This is my view.
Summary : You should consider Balance transfer only if there is significant difference in interest rate / tenure.
Lets take OPs example here :
Current loan balance : 2700000
Current Interest rate : 8.75 (Negotiated )
New Interest rate : 8.5
Lets see calculation for 10 years and 15 years tenure.
| Loan Amount | 27,00,000 | ||
| Tenure | 10 years | ||
| Axis Bank | BOB | Benefit | |
| Interest rate | 8.75 | 8.5 | 0.25 |
| EMI | 33,838 | 33,476 | 362 |
| Total Interest payable Over 10 years |
13,60,587 | 13,17,136 | 43451 |
| Loan Amount | 27,00,000 | ||
| Tenure | 15 years | ||
| Axis Bank | BOB | Benefit | |
| Interest rate | 8.75 | 8.5 | 0.25 |
| EMI | 26985 | 26588 | 397 |
| Total Interest payable Over 15 years |
21,57,320 | 20,85,834 | 71486 |
Here, if you see you get Rs. 71000 Benefit over 15 years of timeframe with monthly Rs. 400 savings, similarly, you get overall Rs. 43000 benefit over 10 years with monthly Rs. 360 savings.
Many banks changes some or other kind of fees (foreclosure, processing fees, agreement cost etc.), if you deduct all these from your total benefits, you will actual saving. Also, the time and man efforts required for all these things also need to consider.
So, in my view ,while you are transferring your loan you have to consider below points :
1. Monthly saving
2. Overall saving for whole tenure
3. Time efforts require for transfer
4. Fees, penalty, charges etc. required for transfer.
Consider all these aspects before you go for loan transfer.
Add mortgage charges.
Even after having a intentive relationship,number of accounts and verbal agreement with himself, the manager called me the regional office approved ROI of 9.10 for me. the man knew I had current ROI of 9.05 and negotiated offer of 8.75 still he showed courage to call me. I hanged the call after 10 minutes and moved on.
For hdfc there is a facility whereby we can pay 5900 for lower interest rates