When to Shift Home Loan from one Bank to Other

Hi,  I read this article about shifting your home loan from one bank to another bank specifically written for Indian users. Article is published in the Punjab Kesari(Hindi) dated 17-08 -2013, and tells you to keep the few points in mind to shift your loan from one bank due to the increased interest rates.

Why to shift the Home Loan from one Bank to another?
No body want to pay higher interest rates, so the take the loan from a bank which give it at minimum interest rates, but the interest rates of in home loan in India gets on changing in the banks.

This may happen that you have taken the loan at the lower interest rate and then the interest rates gets higher so, you have to pay the higher installments and it might be out of your pocket to pay such high rates and it becomes a problem for you.
The general solution for this problem is to shift the loan to the another bank. There are few things to keep in mind while you do so.

1. Interest Rate: You must know the interest rate in the bank from which you took the loan and also you have to find about the interest rates at which different banks provide you the home loan.
2. Time Period: You must also keep in mind the loan time period left.
3. Prepayment penalty: Reserve Bank of India has restricted this but still you have to check if the bank still has it.
4. Processing and other charges: They will charge the processing fee to shift your loan to their bank, which will include the stamp fee etc. You must calculate the amount of the processing fee.
5. Analyse the loss or gain: After you have gathered all the information you have to calculate the final gain or loss by adding the extra charges in the expenditure/payment part. If you see that there is some gain, then you should shift your loan to the another bank.

Thank you for your kind visit!