Asking bank to reduce home loan interest rates

[hemanthbn]

Hi Team,
I am having home loan of 48 lakhs @ 9.35% roi which was taken during August 2020 from canara bank, now how to approach bank to reduce home loan interest and based on what parameters how much interest can I ask them to reduce
Another thing is if I reduce my home loan roi by talking to banks then when the RBI cuts roi , would I be eligible to again ask bank to reduce my loan roi, earlier bank had given loan for 6.9% and due to RBI repo rate increase , bank hiked roi on my home loan from 6.9% to 9.35%(thrice interests were hiked)
And as of now I haven't paid any extra emi to bank and not made any lumpsum payments towards loan
Kindly let me know best approach to complete my loan as early as possible pls

 

[prometheus]

The banks shall only approve loan interest if they feel that the payments are on time and CIBIL Score is good. I recently couldn't reduce one of my brother's loan due to the same reason. Still, I would advice to talk to your existing relationship manager, they shall be able to assist on this better. And yes, once the repo rates are cut it will reflect in the interest rates hopefully by this year.

 

[hemanthbn]

My payments are on point, and my cibil is more than 760, so do you mean that if I ask them to cut my interest rate , would that not refelect immediately from next month emi, or do I need to wait until RBI cut the repo rates
One more thing , currently my roi is 9.35% , how much cut in interest I can ask them for
Kindly help here

 

[saurabh2605]

9.35% is higher lower roi in current scenario is about 8.50% and you already said that your emi's are on time and cibil is also good with score above 750.
So you can check with bank to offer your conversion of ROI bank is having policy of conversion of current ROI. You have to pay minimal amount to bank to avail the offer of conversion rate which is approx 5000/- and ask them to reduce till 8.80 or so.

 

[AlertsByVivek]

Which bank home loan do you have ? If HDFC Then they will ask you conversion fee and reduce your interest rate to 8.50%

 

[hemanthbn]

Which bank home loan do you have ? If HDFC Then they will ask you conversion fee and reduce your interest rate to 8.50%

My home loan is under canara bank, they increased almost 3 times interest rates gradually as RBI was increasing repo rates

 

[hemanthbn]

9.35% is higher lower roi in current scenario is about 8.50% and you already said that your emi's are on time and cibil is also good with score above 750.
So you can check with bank to offer your conversion of ROI bank is having policy of conversion of current ROI. You have to pay minimal amount to bank to avail the offer of conversion rate which is approx 5000/- and ask them to reduce till 9.80 or so.

Its 8.80 u meant right, and will the bank reduce home loan interest again when RBI cuts the repo rates and that time will I be eligible to ask bank to cut my interests again

 

[saurabh2605]

Its 8.80 u meant right, and will the bank reduce home loan interest again when RBI cuts the repo rates and that time will I be eligible to ask bank to cut my interests again

Yes I mentioned 8.80 it's tentative. But you can ask to bank to reduce your interest rate if it is on higher side of the market like in in current bank provide roi of 8.60 to till 9.80 or so.

Or there is another option switch over your loan to other bank they will give you lower ROI

 

[prometheus]

My payments are on point, and my cibil is more than 760, so do you mean that if I ask them to cut my interest rate , would that not refelect immediately from next month emi, or do I need to wait until RBI cut the repo rates
One more thing , currently my roi is 9.35% , how much cut in interest I can ask them for
Kindly help here

You might require a higher CIBIL for approval, close to 800. Also, once the RBI commences rate cuts hopefully in this year as majority of us are expecting that, it will automatically be reflected in your ongoing loan since the interest rates are on a floating basis. Based on your credibility you can ask for a reduction around 50 to 80bps which translates to 0.5 to 0.80% from the existing rate of interest.

 

[prometheus]

If you've paid this much so far, I would suggest to wait for few quarters as there is no point in paying or transferring your loan to another bank since you will incur fresh processing fee charges plus applicable taxes on those fees too.

 

[hemanthbn]

You might require a higher CIBIL for approval, close to 800. Also, once the RBI commences rate cuts hopefully in this year as majority of us are expecting that, it will automatically be reflected in your ongoing loan since the interest rates are on a floating basis. Based on your credibility you can ask for a reduction around 50 to 80bps which translates to 0.5 to 0.80% from the existing rate of interest.

Thank you Prometheus, let me go to bank for negotiations

 

[prometheus]

Thank you Prometheus, let me go to bank for negotiations

Yes you can even connect with your existing RM for the same, you're welcome!

 

[hemanthbn]

If you've paid this much so far, I would suggest to wait for few quarters as there is no point in paying or transferring your loan to another bank since you will incur fresh processing fee charges plus applicable taxes on those fees too.

Hi Prometheus, I discussed with bank regarding reducing home loan roi, they are asking around 10k for processing fee 48 lakhs home loan, they say it is policy of bank, is that really mandatory

 

[hemanthbn]

Hi Prometheus, I discussed with bank regarding reducing home loan roi, they are asking around 10k for processing fee 48 lakhs home loan, they say it is policy of bank, is that really mandatory

And also what all other terms and conditions I need to check before the rate cut is done, will banks put any other hidden things before they give roi cuts

 

[hemanthbn]

Hi all, I discussed with bank regarding reducing home loan roi, they are asking around 10k for processing fee 48 lakhs home loan, they say it is policy of bank, is that really mandatory, kindly let me know based on my above query pls

 

[prometheus]

@hemanthbn

Yes, processing shall be mandatory but I would suggest try calculating once if it's worth to pay that amount depending on the interest rate deductions.

 

[hemanthbn]

@hemanthbn

Yes, processing shall be mandatory but I would suggest try calculating once if it's worth to pay that amount depending on the interest rate deductions.

Yeah as of now, for 9.35% my emi is coming around 44500, they were telling they will give 8.4% roi for remaining balance of 4384922 loan for 16 years, definitely it is worth paying

 

[hemanthbn]

Not able to decide, if I should go for bank asking to reduce roi for my home loan, I saw news regarding that RBI would reduce reporate in some weeks , so is it good to get roi reduced now by paying 5k as processing fees