I have a home loan with ICICI which I got about 3 years ago. Now, I look
to close that loan and go for a bigger house. How do I get this done?
You will have to pre-pay the existing loan and take a new loan to finance the purchase of the bigger house. You may have to pay pre-payment charges on paying off your existing loan if the loan is under fixed rate. Before you apply for second loan, it is advisable to close your existing loan so that the eligibility for the second loan is not impacted by existence of the first loan. For pre-paying the first loan, request the bank to provide you with outstanding amount details.
The bank will typically provide you the estimated amount, on payment of which the outstanding loan will be fully paid off. This amount includes the prepayment charge, if any, chargeable by your bank. This letter will also list the documents held by them that will be released on payment of the stated amount. This amount mentioned is typically calculated as on a future date, to enable time for the buyer to arrange the payment.
After the payment of all dues, the bank will return your original documents and issues you a loan closure letter indicating that there is no outstanding amount to be paid. Please make sure you get the no dues certificate to obviate any issues in future. For your new loan, you can consider your existing lender, apart from others, in the market.
You will have to pre-pay the existing loan and take a new loan to finance the purchase of the bigger house. You may have to pay pre-payment charges on paying off your existing loan if the loan is under fixed rate. Before you apply for second loan, it is advisable to close your existing loan so that the eligibility for the second loan is not impacted by existence of the first loan. For pre-paying the first loan, request the bank to provide you with outstanding amount details.
The bank will typically provide you the estimated amount, on payment of which the outstanding loan will be fully paid off. This amount includes the prepayment charge, if any, chargeable by your bank. This letter will also list the documents held by them that will be released on payment of the stated amount. This amount mentioned is typically calculated as on a future date, to enable time for the buyer to arrange the payment.
After the payment of all dues, the bank will return your original documents and issues you a loan closure letter indicating that there is no outstanding amount to be paid. Please make sure you get the no dues certificate to obviate any issues in future. For your new loan, you can consider your existing lender, apart from others, in the market.
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