Home Loan Transfer from IDBI to SBI

POSTED BY Amit K.Shrikhande ON October 18, 2012 11:48 am COMMENTS (6)

I have taken the home loan from IDBI bank in NOV.2010. The ROI was 9% and now I am paying 11%. There is a annoucement from IDBI bank there will be reduction of 0.25% in ROI for existing customer and from NOV.12 onwards the ROI will be 10.75%. Now  I am in dilema, Shall I transfer my home loan to SBI who is offering 10% or shall I continue with IDBI with 10.75%???The transfering the charges will be around 10K and since I have chosen to go for principal amount foreclosing, the interst for the month will paid by me. The amount will be around 19 K. The documentation at SBI is very irritating and it is very lengthy procedure. Also SBI officials are non commital about the time required for sanctioning the amount. The difference of EMI with SBI home loan will be Rs.800/- Is it worth to switch to SBI??? or IDBI is still better option??? please suggest.

6 replies on this article “Home Loan Transfer from IDBI to SBI”

  1. Dear Amit, please confirm that your loan is base rate linked or PLT linked? From your query it seems, your loan is PLR linked. Please switch to base rate linking immediately as it’s free of cost as per RBI guidelines.

    Later on pay the fee to convert your loan within IDBI to current date ROI.

    It’s better than switching to SBI.

    Thanks

    Ashal

  2. Hitesh Kumar says:

    Dear Amit,

    I am just curious to know have you transfered your home loan from IDBI to SBI? OR still you are with IDBI.

    I also borrowed home loan from Axis Bank and thinking to transfer to SBI. Hence I want to understand the procedure of home loan transfer.

    Thanks
    –Hitesh

  3. Muthu Krishnan V says:

    no bank takes more interest in beginning and less later. Interest component is more in the beginning since the outstanding amount is also more. The ROI and hence amount charged is the same if duration left is 180 months or 18 months. Prepaying any time is advantageous.

  4. The point is you are looking at this moment , how do you guarantee that in future SBI will not raise its interest rates ? And how much more years are left for you to pay off the loan ? Is it few years or 15-20 yrs , whats your prepayment strategy ?

    Given lot of documentation and the initial charges, It might be a good idea to just continue . You will have to do some maths on both the options . Have you done it at your end ?

    1. Amit K.Shrikhande says:

      Dear Mr.Manish,

      There is no guarantee that SBI wont be increasing the rates…but still it hurts to pay the hard earned money in interest. BTW my remaining tenure is 186 months. After choosing the SBI the tenure will be 180 months. But if the IDBI revises the rate by 0.25% then the tenure will be 179 months!!! ( IDBI has announced the same but till date they have not implemented yet 🙁 )regarding the prepayment I am planning to prepay atleast 50 K per annum. One more thing as I understood from the loan that each and every lender will deduct maximum interest first and subsequently principal latter. Means till date to IDBI bank I have paid maximum amount towards interest. Now they have started increasing some portion in principal also. In the SBI same thing they will happen first interest and then principal. Back to square one!!! Due to this severe confusion I had sought your advise. Please reply..

  5. Amit K.Shrikhande says:

    Dear Mr.Manish,

    Please reply to my question…

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