Home Loan Case Study:
Loan amount 20 Lacs, existing ROI 10.5%
Home loan with a IDBI bank which charges 10.5% interest rates. Also they allow part-payment facility only once in a quarter (maximum 25% of outstanding principal in a year) + IDBI has trick to say that if you do your part payment at 15th of the month, it will get effected from next month !! so they make sure to charge you for the next 15 days of interest !!!!
Option 1: Transfer loan to HDFC home loan scheme of 8.25% for first two years
To fore-close existing loan IDBI BANK charge is %, therefore for loan of say 20 Lacs,
fore-closure charges of IDBI = 2% of 20 lacs = 40,000 Rs.
10.3% service tax on the same = 4,120 Rs.
Total fore-closure charges = 44,120 Rs.
Application to HDFC
Processing fees = 10,000 Rs.
Stamp duty = 0.2% of 20 lacs = 4,000 Rs. (+tax10.3%412 Rs)=4,412 Rs.
Total cost of application = 14,412 Rs.
Total cost of loan fore-closure + transfer = 44,120 + 14,412 = 58,532 Rs.
So if one keeps the EMI same as previous bank then sure he will save ~7 installment which is equivalent to ~2,30,000 Rs. which effects into reduction of my loan tenure and net effect even after re-paying cost of transfer he will be able to save ~1.7 Lacs.
So what benefits you get
so do let me know ur views on this ....
cheers !!
Loan amount 20 Lacs, existing ROI 10.5%
Home loan with a IDBI bank which charges 10.5% interest rates. Also they allow part-payment facility only once in a quarter (maximum 25% of outstanding principal in a year) + IDBI has trick to say that if you do your part payment at 15th of the month, it will get effected from next month !! so they make sure to charge you for the next 15 days of interest !!!!
Option 1: Transfer loan to HDFC home loan scheme of 8.25% for first two years
To fore-close existing loan IDBI BANK charge is %, therefore for loan of say 20 Lacs,
fore-closure charges of IDBI = 2% of 20 lacs = 40,000 Rs.
10.3% service tax on the same = 4,120 Rs.
Total fore-closure charges = 44,120 Rs.
Application to HDFC
Processing fees = 10,000 Rs.
Stamp duty = 0.2% of 20 lacs = 4,000 Rs. (+tax10.3%412 Rs)=4,412 Rs.
Total cost of application = 14,412 Rs.
Total cost of loan fore-closure + transfer = 44,120 + 14,412 = 58,532 Rs.
So if one keeps the EMI same as previous bank then sure he will save ~7 installment which is equivalent to ~2,30,000 Rs. which effects into reduction of my loan tenure and net effect even after re-paying cost of transfer he will be able to save ~1.7 Lacs.
So what benefits you get
- Flexibility of part-payment, & as it is paid effect on interest taken care of (note IDBI is not doing this)
- You can see loan details on-line (for IDBI, they are not still ECS also, so no way u can know abut ur home loan status, unless specifically asked and for that u need to go there)
- Get minimum benefit of over a lakh of rupee which is worth considering
- IDBI - no ECS available so u need to give lot of cheques signed !!!! post dated .. and if there is a mistake then !!!! of course u need to pay off for that !!! HDFC - no doubt they provide ECS
so do let me know ur views on this ....
cheers !!
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