Choosing a Lower Rate of Home Loan: Important Thing to Know
The facility of switching to a lower interest rate by choosing the transfer of current loan can be availed by Home Loan seekers.
The alteration of interest spread on the loan provides a lower interest rate for new borrowers. The increase of EMI or duration of the loan needs to be chosen by the borrower.
- Letter of Request: As soon as the option is chosen, a request letter has to be submitted and acknowledged by the particular bank. The assurance is provided by the bank through a promissory note for repayment at the new rate of interest.
- Conversion Charges: There is a fee of conversion charged by the bank ranging from 0.25-1 percent of the loan amount. The payment is made through cheque given during submission of documents.
- Bank Audit: After the submission of documents, the bank analysis them for satisfaction and then changes the loan to one with new interest rate. A conversion letter with specific norms is provided to the borrower.
- New Cheque: If the option of increasing installment is chosen along with post-dated payment cheques, fresh EMI cheques are issued.
Points to keep in mind when looking for Lower Rate of Home Loan:
- The conversion letter needs to be signed by all loan aspirants.
- The online conversion facility is also provided by some financial institutions which are subjected to the acknowledgement of signed documents.
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