6 Things to Consider Before Transferring Your Loan
3. Collateral to Outstanding Ratio
If you are switching your loan after most of your interest has been repaid, then do not offer the complete original collateral/security to your new lender. Although, it would make no sense would to give a security which is twice the amount of your loan outstanding? Why not to use it for getting a separate loan, in case any need arises. So be smart enough to offer a smaller amount of collateral to your new bank. But if the bank still insists on the same, then better negotiate for reducing the interest rate further.
4. Charges and Benefits of Allied Account Requirements
Before borrowing money from a new bank, learn about their provisions and policy, and then see whether it fits well into your requirements. Generally, when a bank sanctions you a loan, it would require you to open a savings account and pay your EMI’s through that account. In case your new bank also does so, find out the charges applied and the banking facilities provided to you. For instance, a Canara Bank education loan account does not accept EMIs through online banking.
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