16 Aug What Are The Things You Need To Keep In Mind While Switching Your Home Loan?
Availing a Home Loan is not as easy as it sounds. You might have to face a lot of complications while applying for a Home Loan like there might be some problem with your documents, or you might have a low credit score, or the interest rate might be too high, etc. Sometimes the bank does not provide you the loan amount in full payment. This is called a partial disbursement.
A partially disbursed loan is when the bank provides you 50-80 percent of the loan amount. But if you are facing problems regarding the payment of the loan from the bank you can either consult the bank for full payment or switch the loan to other banks.
You also have the option of transferring your Home Loan if it’s partially disbursed. And by doing this you will be able to convert the loan which is partially disbursed into a loan that is fully disbursed and switch your pre-EMI into EMI. Since the rate of interest is connected to the base rate, you often had to pay a higher rate of interest. But that’s not the case if you switch to MCLR rate.
While shifting the loan you have to consider the interest rate offered to you by other banks. Your current bank might not approve the switching of the loan. It might also happen that your current bank might also offer you low-interest rate. At that time you must compare the interest rate given by the current and the other bank while switching the loan.
The tenure of the loan can range anywhere from 6 months to 10 years. As the lowest possible period is 6 months the judgment to invest in an ultra-short term fund can be done. While you consider other options, you must also consider the Home Loan rates given by both the banks as these rates can increase the final amount that you are going to pay for the loan.
While processing the loan, the banks and money lenders can charge you processing fee and hidden costs more than the permissible costs. So you need to be clear and look for the best Home Loan lender who provides you a loan at a low-interest rate and keep no costs hidden from you.
There are free Home Loan EMI calculators available online which can help you understand how much EMI you will have to pay on your Home Loan. All you need to do to use this calculator is enter the loan amount, the rate of interest that the bank is charging you and the tenure you are going to take to repay the loan. The calculator will help you get an idea about the interest rate that you have to pay and once you know the amount that you’ve to pay, it’ll be easier for you to manage your finances. You have to be very careful while making a loan switch. You have to consider all pros and cons while making a loan switch. The attractive offers and interest rate can lead you to make a wrong decision. While switching the loan you can take the help of a loan advisor, who will help you with your doubts and provide you with the necessary information.