Looking to reduce your overall interest payments on your loan against property? You may just want to transfer your outstanding dues to a different lender offering more competitive interest rates.
Before making the switch, you must take a look at the interest rates and processing fees that different lenders charge. This will help you get the most affordable deal.
Here are the details of applicable charges and loan against property balance transfer interest rates of major housing finance institutions.
The loan against property balance transfer interest rates and processing fees charged by some of the major lending institutions are as follows:
Lender |
Interest Rate (% per annum) |
Processing Fees |
9.95% onwards |
Up to 0.4% of the loan amount |
|
8.99% onwards |
1% of the loan amount |
|
10.60% onwards |
(0.5% of the loan amount + 18% GST) + (Lower of ₹5,000 + 18% GST or 0.25% of the loan amount +18% GST) |
|
9.45% |
1% of the loan amount |
|
13.9% onwards |
Up to ₹27,000 + 3% of the loan amount exceeding ₹12 Lakhs + GST for loan amounts above ₹12 Lakhs |
This table will help make you an informed decision about where to shift your existing loan against property. Do note that lending institutions may charge you two types of Loan Against Property balance transfer interest rates. These are:
This type of interest rate is calculated on the entirety of the loan amount and distributed equally over the number of EMIs. It does not take into account the constant reduction of the outstanding principal as you repay it.
This type of interest is easier to calculate as compared to the reducing balance interest rate.
This type of interest rate is calculated on the overall outstanding principal of the loan amount. The total interest payable reduces with time as you repay the loan through EMIs. Therefore, these loans are cheaper as compared to the ones with fixed interest rates.
With a better understanding of the rates, here is how you can apply for a LAP balance transfer when you have chosen the ideal lender:
Check the eligibility criteria set by the lender
Check the documents that will be required
Check the loan against property balance transfer interest rates
Inform your current lender and fill in the application form for the new lender
Submit your property documents, income proof and NOC from existing lender
The new lender will verify your documents and let you avail the Loan Against Property balance transfer facility
Some of the factors that affect loan against property balance transfer interest rates are:
Your monthly income is an important factor that lenders consider while deciding on interest rates. With a higher income, lenders consider you to have a lower risk profile. This means you can get such a loan at a lower interest rate.
Lenders will also consider your profile as low-risk if you have exhibited healthy repayment patterns in the past. This translates into a lower interest rate. On the other hand, if lenders spot inconsistencies in your repayment history, they may charge you higher interest.
Lenders normally assess this by checking your credit score.
Apart from these factors, loan against property balance transfer interest rates may also change based on the type of property you mortgage. Your chosen loan tenure may also affect the interest rates.
If you have a savings account with a bank or have taken loans in the past, your prior dealings with a lender can help you get a lower interest rate. Additionally, if you have previously taken loans and repaid them on time, you can even negotiate the repayment terms.
You can transfer your existing debt against property to a new lender to enjoy a more cost-effective repayment journey. The loan against property balance transfer interest rate is the rate at which the new lender offers you the loan.
You can get the most competitive loan against property balance transfer interest rate by meeting the new lender’s eligibility criteria, maintaining a high credit score and applying with a lender you have a prior relationship with.
When you switch your LAP to a new lender, you pay certain fees along with the new
loan against property balance transfer interest rates. This includes a processing fee that may go up to 7% of the loan amount. This fee covers the lender’s administrative charges for verifying your information and sanctioning the LAP.
Your income level, credit score, repayment history and relationship with the bank may affect the LAP balance transfer interest rates.