How To Switch My DHFL Home Loan? (Balance Transfer)

Updated on December 28, 20184 mins read
DHFL

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Problems faced with DHFL

You are probably here because you have taken a home loan with Dewan Housing Finance Limited (DHFL) and are unhappy with your current situation. There are two common problems faced by DHFL customers:

High Rate of Interest:

The story goes something like this: You took a home loan. You paid a fixed EMI every month and everything was going according to plan. One fine day, you discover that your EMI has suddenly been increased and you are barely able to keep afloat with your expenses. The EMI changes when your loan enters the floating-rate period and your interest rate changes according to the market conditions. If you are looking at a long repayment tenure, even a small rise in the interest rate can drastically increase your repayment amount. For example, at the beginning of the floating-rate period if:

  • Outstanding loan amount- Rs. 50Lc, Tenure- 15 years, Interest Rate- 9.50%
  • Then, Total Repayment Amount: Rs. 93,98,021

Let’s say your interest is increased to 10.50%

  • Then, Total Repayment Amount: Rs. 99,48,591

Therefore, with an interest rate increase of just 1%, you pay an extra interest amount of Rs. 5,50,570! During the floating rate period, DHFL has some of the highest interest rates in the market, ranging from 10 to 13% of the principal amount. This sudden and large increase in interest rate can cause your monthly finances to go completely off-track.

Poor Customer Service:

While a high Rate of Interest is enough for you to consider a loan transfer, it is generally aggravated by the fact that you have to deal with an apathetic customer service. DHFL customers often face frequent service issues like hidden charges and an unresponsiveness to queries and complaints. These problems are very common and are generally the reason why DHFL customers are upset and searching for a way out. If you are stuck in a similar situation, there are two options that can solve your problems: 1) Internal Switch to lower interest rate within DHFL 2) Switch your loan to another Loan Provider – calculate your savings

Option 1: Internal Switch to lower interest rate within DHFL

Finance corporations are businesses. And like any business, they hate losing customers because it reduces their long-term profits. If a high Rate of Interest is why you want to transfer your loan, have a chat with the Relationship Manager at your home branch. Tell them that you are unhappy with your current interest rate and are considering switching to another home loan provider. If you have been regular with your payments, there’s a good chance that DHFL will reduce your Rate of Interest for a processing fee of approximately Rs. 6,000. Pros:

  • An in-house reduction in Rate of Interest saves you the hassle of transferring to another bank while reducing your repayment amount.

Cons:

  • Since you are in your floating-rate period, it is quite likely that DHFL will once again increase your rate and ask you to pay an additional Rs. 6000 to reduce it.
  • An internal switch does not remedy customer service problems.

Option 2: Transfer your home loan from DHFL

A loan transfer or balance transfer as the name suggests is the process of switching your loan from your current provider to a new provider. Almost all lenders offer this service and if you are in the beginning stages of your floating-rate period, transferring a loan to the right lender can result in significant long-term savings for you. Once you have made up your mind about switching to another home loan service, here’s how you go about it.

Details of Switching your loan from DHFL                            

Turnaround Time: 25 days This is the average time required from application to completion of home loan transfer and may vary on a case to case basis. The documents you need submit to DHFL for loan transfer are: Customer feedback form duly signed by you The documents you need to take from DHFL for loan transfer are:

  1. Foreclosure letter
  2. Complete loan account statement
  3. Original list of documents

Fees charged during the loan transfer process:

  1. Foreclosure Charges: Rs 572/-
  2. Loan account statement for 1 year: Rs 140/-
  3. Complete loan account statement: Rs 400/-
  4. Prepayment Penalty: 2% penalty of outstanding principal amount (This is charged ONLY if your loan is still in the fixed-rate period)

So these are all the details for transferring your home loan from DHFL to another lender. In case you want to switch due to a high interest rate, it is always recommended that you begin the transfer procedure as soon as possible. The earlier you apply for the transfer, the higher your long term savings are and the longer you have to get all the necessary documents in place. 

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