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Your bank won’t tell you this!

But do negotiate with them!

Check out the whole reel!

Do remember though, Balance transfers and renegotiating with your bank come with costs!

Banks typically charge 0.15-0.2% processing fees, Rs.5k-10k technical assessment fees, and 0.1%-0.2% franking charges.

Now coming to our calculation-
Let’s say you have an existing home loan, with outstanding principal - 40 lakhs @ 10% and remaining tenure - 20 years.

Your existing EMI would be ₹ 38,601.

Now if you transfer to a bank who’s offering loan @ 9%, on 40 lakhs for 20 years.

Your new EMI would be ₹35,989.

Saving you ₹ 2612 every month, in 20 years that would be around 6.27 lakhs.

Now, if you keep your EMI constant i.e. ₹38,601, then the difference of 2601 that you pay will go towards principal repayment.

That way you will save additional 8.78 lakhs on interest payment.

Conclusion
Before taking any decision do a cost benefit analysis comparing the charges and new interest rate, terms and conditions.

Transferring your loan balance early in the tenure is beneficial.

Later EMIs mostly cover principal, so even with a lower rate, savings might not be significantly impacted. Contact your bank for details.

Disclaimer: The calculation provided is for illustrative purposes only and is based on hypothetical scenarios. Actual savings may vary depending on various factors such as prevailing interest rates, terms and conditions of the loan.

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[Anushka Rathod, Finance, home loan, RBI, Banks]