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A home loan generally forms a higher amount as compared to other types of debt, and this has a significant impact on the interest rate. There are avenues available through which applicants can reduce their interest rates. One of the ways is to transfer your existing home loan to an institution offering a reduced home loan interest rate.
Shifting your home loan to another bank/NBFC will be extremely beneficial and this fact is a no brainer. Such debt transfers from one lender to another are completely legal and allowed by many prominent financial institutions in India. This process is referred to as home loan balance transfer. It is a unique solution for customers who are operating on a tight budget and need some form of financial relief.
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After receiving a duly completed application form we examine all the papers you’ve handed in. When these are found to be in order, you get sanctioned a certain amount, depending on factors like: the amount you had asked for, the value of the collateral property, and your ability to repay loans (creditworthiness). In case of a rejection, you will be informed. Then our in-house lawyers and property experts will verify the property documents and carry out an evaluation, which thereby reduces the time taken to process the loan. Upon completion of both these procedures, we initiate the disbursement of your Home Loan.
It is not mandatory to have a co-applicant. If someone is the co-owner of the property in question, it is necessary that he/she also be the co-applicant for the Home Loan. If you are the sole owner of the property, any member of your immediate family can be your co-applicant.
If your new mailing address is the same for which the loan has been taken, you may change the address by logging in to our Customer Portal. If your new mailing address is not the one for which the loan has been taken, you will need to visit us in person at your nearest branch along with an original and self-attested copy of your new address proof and photo identity. For the list of documents, we accept Proof of new residence for verification purposes.
You may update your mobile number and email address by logging in to our Customer Portal.
Provisional Interest Certificate gives the Principal and Interest breakup for the scheduled EMI for a complete Financial Year i.e. from April to March. This calculation can be used for claiming the Income Tax rebates in appropriate cases under Section 80C as well as Section 24 of the Income Tax Act. The calculations are based upon Current Principal Balances, Current ROI and Current EMI along with any changes recorded in the Current Financial Year. Any change that may happen before the end of the Financial Year will alter the calculation and the figures. You can get this by logging in to our Customer Portal.
The Provisional Income Tax Certificate can change under certain circumstances like change in Interest Rate. The projection is calculated on “as is” basis and does not consider any future change that may happen either on the Interest, EMI or the Principal.
Your EMI consists of two parts—paying back the principal amount you borrowed, plus the interest rates charged ‘on’ it. Three factors come into the equation—how much you borrowed, the rate of interest, and the loan tenure. There are ways to bring your EMI down: for one, it drops automatically if there is a drop in the interest rates, or if you pay back more than you need to (called a ‘partial prepayment’).
There are two ways of going about this: 1. An Electronic Clearing Service (ECS) is an easy and convenient option, available exclusively to those that have a bank account. Your EMIs get paid out automatically from your account every month, at a specified date. 2. You may also choose to hand in a fresh set of Post-Dated Cheques (PDCs) ahead of time, from any bank account. Note that this is only for those customers in non-ECS locations. ECS is the preferred mode, as it’s faster and there are no chances of errors. Plus, there’s no hassle of replacing PDCs when the EMI changes, or when they run out.
When there’s an unexpected increase in interest rates, we first attempt to make things easier for you by increasing the loan tenure—within permissible limits. If this doesn’t resolve the issue—covering interests under current EMI—we’ll need to increase the EMI. Another solution—you can make a partial prepayment at the nearest branch to reduce the interest amount. Alternatively, you can choose to part-prepay online via the Customer Portal.
You can choose to pay your EMIs by electronic methods (ECS), by handing in post-dated cheques, or through direct payments. Going in for the ECS option, you’ll need to pay the revised amount from the subsequent month; you’ll be paying the differential amount separately, during the current month. If you’re going with the PDCs, you’ll need to completely replace your old cheques. You can also choose to increase the EMI amount whenever you choose to during the loan tenure, which will result in reducing the loan tenure. To avail this option just logon to our Customer Portal.
When interest rates go up, the interest component of an EMI also goes up. The EMI is kept constant as explained in the previous section, which results in a lower principal component. If the rates move up continuously, then there might be a situation where the interest Component becomes more than the EMI. In such a situation, principal component (EMI minus interest component) gives a negative figure. Consequently, the outstanding balance, instead of being reduced from the opening principal with the principal component, gets increased with the negative principal component. This is commonly referred to as negative amortization. A loan where the amortization is negative does not get repaid, ever since the regular payments are insufficient to cover the interest component. The unpaid interest gets added to the principal and makes it grow. The situation gets reversed only when interest rates start falling. The customer does part-prepayment or increases the EMI.
In case of a home loan with variable rate, the interest rate used to calculate the interest component is subject to variation. When rates change, one of the following changes can be done to a loan: 1. The term of the Loan is extended (when rates go up) or contracted (when rates go down). 2. The Instalment (EMI) amount is reset (increased in case rates go up & reduced in case rates come down). 3.As a practice, the term of the home loan is extended since the self-employed customer, might have given PDC’s and it would be difficult to replace them on every rate change. However, in case of under construction properties, the Pre-EMI amount is increased by default.
In case the interest component exceeds 85% of the EMI amount at any time, it should be a warning to the customer. This will ensure that variation in interest rates does not cause any inconvenience.
Internal FRR is the benchmark reference rate. This is determined on the basis of market conditions and the cost of funds for the company. These changes depend on various external factors and economic conditions.
As per our re-pricing policy, home loan interest rates are reviewed every 2 months and a decision is taken whether to change the interest rates or keep that unchanged.
This is a bi-annual exercise that is yet another an industry first for any NBFC in the country. As a goodwill gesture and to maintain transparency with our valued, existing self-employed customers, we ensure through our pro-active downward re-pricing strategy, that none of our existing customers are more than 100 basic points over and above the last 3 months average sourcing rate. If customers are higher than 100 bps from our last 3 months average sourcing rate, we carry out downward re-pricing of the rate of interest for them. This brings them to maximum 100 bps above the last 3 months average sourcing rate.
Home Loan sanctioned for under construction property is disbursed in installments by us. These disbursements in installments are called part / subsequent disbursement. You will need to make an online request to Finserv Markets for the part disbursement.
The time taken depends on the category in which your property falls. We categorize every property into APF (Approved Project Facility) and Non APF. The time taken by the processing for part disbursement would be: 4 working days - If the property is part of Approved Project Facility and 7 working days - If the property is not part of Approved Project Facility.
You will need to submit online request for part disbursement to Finserv Markets, along with the following documents. 1. Scanned copy of demand letter from the builder. 2. Receipt of last payment made to the developer.
No, foreclosure of your loan will have no impact on your CIBIL score. Once the loan is foreclosed the same would be reported to CIBIL as ‘Closed’ and it would have no impact on your CIBIL Score.
Pre-EMI interest is the interest that you need to pay on amount you borrow from Finserv Markets. Commencing from the date of each disbursement, you can pay each month, until EMI payments start.
Home Loan Balance Transfer is when you switch your existing home loan, and the entire principal amount that is still unpaid, to another lender for a lower interest rate. The lender that you had originally taken the loan from will receive this unpaid amount, while you continue to repay the loan amount at a new interest rate to the new lender that takes up your loan. You should first understand home loan balance transfer carefully before opting for the same. It is important that you ascertain the benefits you will receive by way of lower interest rates before you choose a home loan balance transfer scheme. You can apply for home loan transfer online with Finserv Markets.
Yes, you can always transfer your existing home loan to another financial institution. People often want to transfer home loans when they find that they are paying a higher rate of interest, as compared to market rates. This takeover of home loans is called home loan balance transfer. It basically involves transferring your unpaid principal amount from one lender to another at a lower rate of interest. Home loan balance transfer is a great way to reduce your debt in case you find that your present home loan is too expensive. You can use the Finserv Markets home loan balance transfer calculator to work out your savings in accordance with the lower interest rate.
The documents required for home loan balance transfer include proof of address, identity proof, photographs, proof of income, and latest bank statements. In addition to these, you will also have to provide documents related to the purchase of your home. These include the NOC from your developer/housing society, documents from the first lender, and documents that prove the ownership of the property for which you are taking the loan. At the initial stage of application, you have to submit a letter to your current lender, requesting a balance transfer for your home loan. You will then get a letter of consent, a foreclosure letter, an NOC (no objection certificate), a loan statement displaying your EMI repayment track record, and a list of property documents. All of these have to be provided to your new lender, along with your personal identification documents. You can use our eligibility calculator for home loan balance transfer, which will help you plan your next steps better.
The RBI home loan balance transfer policy contains information on balance transfer charges that you will have to take into account before transferring your home loan. The RBI has directed financial institutions to refrain from charging foreclosure fees when it comes to floating interest rate home loans. Earlier, lenders would levy a prepayment penalty ranging between 2-5% of the outstanding principal at the time of refinancing the home loan. Under the new guidelines, individual borrowers of floating interest home loans are exempt from such penalty charges. The charges remain in place for individual borrowers of fixed interest home loans, and all non-individual borrowers. Even if you are exempt from penalty charges, you are still required to pay a processing fee to your new lender which could vary between 0.5-1% of the loan amount. This amount is sometimes restricted by many lenders to Rs.5,000.
Based on your city of residence, to get a home loan, your salary should be the following - (1) Minimum Salary – Rs. 30,000; Cities - Delhi, Gurugram, Faridabad, Greater Noida, Noida, Ghaziabad, Mumbai, Thane, and Navi Mumbai. (2) Minimum Salary – Rs. 25,000: Cities- Bangalore, Pune, Hyderabad, Chennai, Ahmedabad, Kolkata, Jaipur, Chandigarh, Coimbatore, Nagpur, Surat, Cochin, Baroda, Indore, Vizag, Nasik, Aurangabad and Lucknow.
The minimum value of your property should be as follows: (1) 40 Lakhs - Mumbai and Delhi (excluding NCR). (2) 30 Lakhs - Bangalore, Pune, Hyderabad, Chennai, Thane, Navi Mumbai and NCR (Faridabad, Gurgaon, Ghaziabad, Noida, Greater Noida). (3) 20 Lakhs - Kolkata, Ahmedabad, Chandigarh, Cochin, Coimbatore, Indore, Jaipur, Nagpur, Surat, Baroda, Nashik and Vijayawada. (4) 15 Lakhs - Aurangabad, Vizag and Lucknow.
The TAT for issuance foreclosure statement is typically 7 working days.