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I wand to transfer my loan,which I took in 2009 to another bank,as my interest rates are really high and I wish to shift to a lower interest rate being offered.

Written by Adhil Shetty | Published:May 21, 2012 2:58 am

I wand to transfer my loan,which I took in 2009 to another bank,as my interest rates are really high and I wish to shift to a lower interest rate being offered. How does it work?

—— Soojit Sarkar,Mumbai

You will need to submit a letter to the existing lender requesting a loan transfer. Based on your request,the bank will give a consent letter/ NOC and a statement mentioning the outstanding amount. This needs to be provided to the new lender who then sanctions your loan amount to the old lender for an account closure. Once the transaction is over,your property documents will be handed over to the new lender,the remaining post dated cheques/ ECS will be cancelled. The bank you are shifting to of course,will offer you a loan based on the current home loan rates they are offering to their home loan applicants.

Who can take a joint loan? Do both borrowers get tax benefits?

—Harnam Arora,Chandigarh

A married couple or a parent and child can take a joint loan. Some banks allow brothers to take a joint home loan provided they will both be co-owners of the property. Banks insist that all co-owners of the home must be co-borrowers in a joint home loan. Exceptions include sisters,friends or unmarried couples living together etc. Both borrowers will get tax benefits. You as well as the co-borrower can avail tax rebates on the principal and interest repaid on the loan up to the respective limits specified individually.

What is rule of 72? Does investment really double?

—Archi Parmar,New Delhi

Yes. This is an easy mathematically approximate way to figure when your investment doubles. This is a thumb rule called the “Rule of 72”– that gives us a very reasonable idea of over what approximate time frame our money will double. Just divide 72 by the rate of return or interest rate to find out the duration during which your money will get doubled. We can check this through an example. Say National Savings Certificate (NSC) promises a return of 8 per cent pa. Dividing 72 by 8 we get 9 which is approximately equal to the time frame guaranteed by the Postal Department.

What does a credit score look like and what is a good score?

—Udayan,Mumbai

A credit score is generally a three digit number within the range of 300 and 900. Higher the score the better it is. This score will reflect information from several lenders and across various loans.

—The expert is CEO,Bankbazaar.com,For your personal finance queries please email at,expressmoney@expressindia.com

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