If you are thinking of switching your bank owing to a higher interest rate on home loan, then this is for you…
While the State Bank of India (SBI) has frozen interest rates at 8% for a year for new home loan seekers, many are reconsidering their decision to go in for SBI or a PSU bank as opposed to private banks like HDFC and ICICI, which offer loans at a much higher rate of interest (11-13%).
No doubt it would be feasible for you (in case you are a new seeker) to go in for a PSU bank, but if you already have taken a loan from a private bank, transferring it to a PSU bank isn’t advisable.
Firstly, it’s a very tedious process and involves a lot of paperwork; secondly chances are that you may end up paying much more by virtue of ‘prepayment charges’.
In some case these charges may be as high as 2 to 3%. Besides, such a transfer is not possible without the banks approval. So, I would say it’s not worth the effort.
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2 years ago
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