Category : business loan
Banks and finance businesses are looking to gain enterprise by offering lower interest rates. But you, as a borrower, want to study other components as properly, before shifting your loan from one bank to another.
Technically called “takeover of mortgage”, shifting a mortgage means approaching a bank and asking it to problem a loan amount that is outstanding amount with the current bank, repaying to the current bank and persevering with the loan with the new bank. You will enjoy the lower interest rates or decrease EMIs. It gains new business. But, is the interest rate or a lesser EMI the best consideration? Here are few important factors that help you take the final choices:
Calculate the full outflow?
Although the new bank attempts to attract you by using decreasing your month-to-month EMI and providing you with a longer span to repay (increasing your tenure), you have to be clean that such facilities increase the total amount you pay to the bank due to the fact the interest keeps on including to the outstanding loan amount. If you’re paying better EMIs with your present day bank, compare the total outgo for each bank and then take a choice. If you aren’t difficult-pressed for coins, you need to prefer staying with your bank, pay a bigger EMI and finish off your mortgage as quickly as feasible to shop all the cash you will overpay, by means of opting for an extended tenure.
Study the processing fees and different allied prices
Take into attention the processing charge, stamp duty, legal charges, valuation rate, technical expenses that your new bank would fee and examine it with the benefit in terms of reduce interest rates.
For some banks, processing fee is a percentage of the overall loan amount, while for others, it relies upon whether you are salaried or run a business. If the bank calculates it on the basis of the outstanding amount, calculate it in rupee terms to find the cost. Also, your present bank may jack up the charges of closure of account if it reveals out that yours is a case of takeover.