Transfer of Loans

How many of you are aware that you can transfer your home loan to another bank. The Government of India has given the necessary guidelines and statues by which you can shift your home loan to another lender.

The customer may have a variety of reason to transfer to another lender like

  •       Wanting to increase the tenure
  •       They might be looking for a top up or some feature the current lender might not provide.

The rules state that the existing lender must first be paid in full and only then will they deliver the original documents regarding the property and only with these original documents can you avail for a new loan at the next lender. The loophole in this rule is that the current lender forwards a letter regarding the details of all the original documents they possess to the new lender. The new lender then confirms the authenticity of the letter as well as the repayment capabilities and track record of the borrower. This rather simple but time-consuming process has an inevitable service charge. The cost for this verification as well as processing and transfer fees must be paid by the borrower to both institutions. In most cases, each lender has their own charges which are negotiable by the laws governing us. Although the new lender cannot charge you for processing your balance transfer, you may still have to pay the stamp duty and registration charges for the property.  Most of the PG hostels near technopark in Trivandrum have followed this regime.