BANGALORE: Home loan transfer is a refinancing option to get the existing home loan in one bank transferred to another bank in order to avail the benefits of a lower interest rate. Several customers are unhappy with the high rates they are being forced to pay by the banks. Before deciding upon home loan transfer there are few things to consider, as compiled by Yahoo finance

#1.Transfer to another bank Vs negotiation existing bank

If you have a high floating interest rate at the current bank, then transferring loan to a new bank will be beneficial. Banks may not always allow new borrowers who are about 3-4 years into the bank tenure to reap benefits from lower rate of interest or agree upon negotiating other loan terms. If you have ability to pay Equated Monthly Installments on time, then you can approach another bank for home loan refinancing.

#2. Know the rate of interest

A lot of research should be done before you transfer the loan. There are many bank websites where the rates are displayed.  This will help you to identify the best rate of interest being offered by different banks. Some financial experts prefer that there should be a difference of at least 175 base points or 1.75 percent for a deal to be good. Others hold the opinion that since the home loan is a long term debt, even a difference of 0.5 percent will be beneficial in the long run.

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