[narayan]

Originally Posted by krazydriver84

Hey I need to know something,

I presently have a car loan from HDFC, which is like charging me a phenomenal interest rate.

Is it possible for me to transfer the loan to some other bank like AXIS, and ask AXIS to pay off HDFC for the remaining amount and I continue my finance with AXIS?

Please guide me on this.

yes , you can - a few factors to consider

1) foreclosure charges with HDFC
2) how long is your loan in place with HDFC ? if its a recent one, you would have largely paid only interest to HDFC and principal would be fairly in tact. so when u transfer to AXIS, you might not get a dramatic benefit all though interest rates are lower with them
3) check with AXIS if they would do the paper work with HDFC, in terms of handing check to them and taking changing the lien on the RC. otherwise, you might have to do a lot of running aroung and typically a bank in HDFC's position will never be cooperative in such a situation

would help if you quote what is the interest diffference, ur loan amount and how long ur loan is open ?

[krazydriver84]

Hi Narayan.

I took the loan in end september last year, and its over a period of 5 years, am having trouble calculating the interest. but i think its close to 15 or 17 %

If you want I can PM you the DP and the EMI am paying and thus maybe you can help me figure it out.

[csentil]

You took a car loan for 15% ???? Thats astronomical. Whats the EMI, tenure and loan amount. We can workout the interest if we have those.

HDFC has a 4% penalty of pre-closure. That's their standard margin.

[krazydriver84]

The EMI is around 2361, period of 5 years, paid a DP of 35K, loan amount was 97k

Please advise whether I should switch the loan

[NetfreakBombay]

You should have got a large discount with 15% loan

[csentil]

Thats around 16%. I get an EMI of 2358/- for that. But your loan amount (97K) is not so huge. So assuming you've not paid any amount back as principal, a 4% penalty for pre-closure would work out to around 3900/-.

Also assuming you get a loan for 11% your EMI would be around 2110/- a savings of 250/- a month and 15K overall in 5 years.

Subtracting your preclosure and probably other charges from the new bank you would save 9K - 10K in total.

Your call.

[krazydriver84]

WOW!... thats awesome calculations man!.

Now please advise me if I was to go about asking AXIS to finance me this loan, how would I go about it?

[csentil]

Just call up Axis bank and ask them if they take loan transfers. That's the first thing to do. If they say yes they do, then call up HDFC and ask them for a full statement, which would give you a detailed breakup of how much you have paid so far and what is the outstanding amount. Once you have that figure you can talk to Axis and find out what they are ready to offer.

You can also negotiate with HDFC telling them that you might move your loan as the interest is too high. Also if your loan principal amount is very less now (Don't know how long you've been paying your EMI) then there's no point in moving your loan or Axis bank might refuse. You need to get clarity on all these.

[krazydriver84]

Thanks Csentil, am gonna get back to you after the initial findings and then bug you more.

[narayan]

Originally Posted by csentil

You took a car loan for 15% ???? Thats astronomical. Whats the EMI, tenure and loan amount. We can workout the interest if we have those.

HDFC has a 4% penalty of pre-closure. That's their standard margin.

i think KD's was a used car loan - that explains the 15% !!

[narayan]

KD alternately, u cud wait for that big bonus and just do away with this loan in the first place!!

[krazydriver84]

Originally Posted by narayan

KD alternately, u cud wait for that big bonus and just do away with this loan in the first place!!

Hmmm.. I wasn't exactly planning to spend my big bonus in that way.

aren't used car loans transferrable ??

[jaysmokesleaves]

What narayan says makes sense.. unless you wish to make your bank richer!!
There are costs associated with transfering a loan...which, if you calculate, will certainly not give you the benifit you are expecting and certainly not worth the trouble!
Pay it off in one go KD, and when you look back, you certainly may not regret it. I did so with my home loan....against my heart.... Im very happy now.

[krazydriver84]

hmmm. guess you guys make sense. But its tearing my heart just thinking about it. my 1st big bonus flying away with wings. :sad

[csentil]

Oh ok. Its a used car loan. Well I was wondering if someobody takes only 97K as car loan (meaning he's paid the rest upfront) then he would have been able to pay it off completely !!

Used car loan rates are typically higher and dunno if all banks would want to take a depreciating asset. So pay it off in full and be in peace.