It's a smart idea to compare the charges offered by your bank and other bank. This will help you negotiate better interest rates, processing fees and charges levied by other banks on refinanced loans.

Other charges by a new bank include a processing fee of about 0.5 to 1% of the loan amount. Ask for this percentage to be further reduced or waived.

Jaidev met other bank representatives and began negotiating for a floating interest rate on a loan outstanding of 9.5% per annum and a processing fee of Rs 5,000.

Harsh Vardhan Roongta, CEO of apnaloan.com says, "Generally, it works out better if you have about 10 or more years of the repayment period left. Opt for the switch only if the new loan rate is cheaper by at least 0.5% and the pre-payment fee is not more than 2%."

Photograph is for representational purposes only.

Photograph: StockXchnge