[adi.mariner]

Originally Posted by archat68

HDFC do reduce the rate but for that you'll have to apply to them and will have to pay a processing charge .

Yes that's true . But the processing charges compared to the overall reduction in Interest outgo is negligible. So had to go for it. HDFC have reduced the Rate proactively only after Demonetization.

[.sushilkumar]

So had raised a query with HDFC wrt to home loan interest rates not moving in direction with RBI and below is what i got in writing.

One need not be a financial whizkid to understand that all they care for are profits. Who regulated these So called NBFC and how can we force them to follow RBI guidelines. I am thinking of filling a RTI to RBI to see their response. They cannot hide behind the free market and let these banks have free run at a time when govt is busy promoting Affordable housing.

Thank you for writing to us. We appreciate your directly bringing to us your concerns.
We would like to briefly inform you about certain nuances governing your Rate of Interest.

A variable rate home loan ("ARHL") is typically governed by the twin principles of the HDFC Retail Prime Lending Rate and the Spread – reflecting a combination of multiple long term and short term factors prevailing in the economy.

HDFC’s Retail Prime Lending Rate (RPLR) is the benchmark rate for its retail home loans and is based on the cost of funds, operating expenses, cost of regulatory provisioning/capital charge and profit margins and reflects changes in any or all of these from time to time.

The other component of the Rate of Interest i.e. the Spread depends upon a number of factors assessed at the time of availing of the loan such as, the type of loan and product being financed, risk perception vis-à-vis the customer and the product, marginal cost of funds, tenure of the loan, past and expected trends in the performance of the portfolio etc. At the time when the loan is first disbursed, the Spread is fixed by taking into consideration the factors mentioned above and is contractually agreed upon in the Loan Agreement executed between the customer and HDFC.

It is important to note here that the home loans provided by HDFC are largely in the nature of long term finance with repayment periods spanning over multiple years, most time over decades.

The Repo rate is the rate at which the Reserve Bank of India (RBI) lends to banks and is indicative of the rate available for banks to borrow or lend money for short tenors, most typically overnight. As of now, Housing Finance Companies (HFCs) do not have access to the repo rate linked money markets.

The RPLR has continued to be dynamic and has fluctuated in consonance with market trends. The movement in RPLR is not isolated from regulatory intentions and has extensively protected the interests of our borrowers by fluctuating largely in synchrony with the applicable rates in the economy, including but not limited to the repo rate.

[Option to Convert Spread:

In the event, HDFC offers a revised spread on ARHL, the customer can opt for the revised spread with prospective effect in respect of the loan by payment of conversion fees applicable from time to time. The conversion fee is charged to offset the mismatch on the interest differential between our cost of liabilities and the assets. In a changing interest rate scenario, while the assets may get repriced, there is a lag for repricing the liabilities and hence, a nominal fee is charged to offset this differential.

It is pertinent to mention here that, unlike a lot of other institutions, HDFC offers flexibility in terms of the ARHL agreement to its customers wanting to opt for a revised spread from what was originally contractually agreed and settled. This enables an existing customer to re-price the loan from an existing higher Applicable Rate of Interest owing to a lower negative Spread to a lower Applicable Rate of Interest by choosing a higher negative Spread. This flexibility requires HDFC to re-price its liabilities and comes at a cost to the customer, termed as conversion fee. Therefore, you will kindly appreciate that this fee for a spread change is based on a valid transparent and fair commercial rationale and the sameis devoid of any unfairness and / or arbitrariness.]

We hope we have addressed your concerns to your satisfaction and we look forward to mutually beneficial relationship with you in times to come.

Assuring you of our best services always,

Thanking you,

Yours Faithfully,

Team HDFC

[.sushilkumar]

Apologies Mods for back to back post. could not edit earlier post within time.

Spoke to national consumer helpline. Anyone having loan with HDFC, can please help me finding / identifying the specific MTAC clause, where its clearly mentioned that Interest rate is based on variable rates and will move in accordance with RBI Repo rate. If it's written than HDFC Is legally bound to reduce with RBI Repo rate and they are willing to take complaint for same and ensure HDFC fall in line on same.

[adi.mariner]

HDFC Home Loans are always linked with RPLR and the Spread is deducted from that which gives the Rate of Interest. There is no direct clause saying that the RPLR is linked to the Repo Rate set by RBI. RPRL is set by HDFC as per the factors mentioned (cost of funds, operating expenses, cost of regulatory provisioning/capital charge and profit margins).

[Pancham]

Hi Guys. I have a Home loan with SBI. This month because of a mutual goof up (by the Bank and me), the installment amount was debited twice, once through ECS and the other one by me through NEFT.

Is there a way I can adjust or get back the 'extra' installment? Can I withdraw the same amount from my loan account?

[blackwasp]

Originally Posted by Pancham

Hi Guys. I have a Home loan with SBI. This month because of a mutual goof up (by the Bank and me), the installment amount was debited twice, once through ECS and the other one by me through NEFT.

Is there a way I can adjust or get back the 'extra' installment? Can I withdraw the same amount from my loan account?

The first payment will get reflected towards EMI while the other will get adjusted against principal repayment. I'm not sure if you can withdraw it, but it certainly gets adjusted for sure.

After merger of SBI group companies to SBI, we missed paying 2 EMIs due to change in IFSC codes but bank accommodated us saying no penalties would be applicable. We were also paying off an extra amount (other than EMI) every 2-3 months to finish the loan sooner.

[amitk26]

Originally Posted by .sushilkumar

So had raised a query with HDFC wrt to home loan interest rates not moving in direction with RBI and below is what i got in writing.

HDFC and HDFC Bank are two different listed companies , When you approach HDFC bank branch for home loan they direct you to HDFC. So while consumer may think he is getting loan from HDFC Bank but home loan given by HDFC Ltd. I am sure somewhere in the paperwork HDFC Bank might have covered themselves enough legally that consumers can not go to courts for misleading them.

RBI regulates Banks but not NBFCs such as LIC HF , HDFC , DHFL and ILFS and this was one of the possible reason why recent DHFL and ILFS fiascos happened,

[Chalu]

Folks need some advice on the best banks to go for Home loans. Looking for 1.2 Cr loan.

Who provides a lower rate of interest and best customer service.

Thanks in advance

[Pancham]

Hey Guys!

Can anyone please help me understand this "MCLR" business of SBI home loans?

Almost every time the bank reduces the interest rates every other website/media advertises how customers will benefit and the government boasts how the customers' EMI will go down and everyone loses their brains over how the rates have touched 7.XX%.

BUT, how come I don't see any change (read lower interest amount) in my account. First of all the EMI will never go down because it is fixed; it is the interest component that is supposed to reduce. On top of that, SBI charges this enormous switchover fee to change to other rates (e.g. New Lending Rate (EBLR)). I am very confused. My current ROI is still 8.4%. What am I missing here.

Can anyone help?

[rdst_1]

Originally Posted by Pancham

Hey Guys!

Can anyone please help me understand this "MCLR" business of SBI home loans?

Almost every time the bank reduces the interest rates every other website/media advertises how customers will benefit and the government boasts how the customers' EMI will go down and everyone loses their brains over how the rates have touched 7.XX%.

BUT, how come I don't see any change (read lower interest amount) in my account. First of all the EMI will never go down because it is fixed; it is the interest component that is supposed to reduce. On top of that, SBI charges this enormous switchover fee to change to other rates (e.g. New Lending Rate (EBLR)). I am very confused. My current ROI is still 8.4%. What am I missing here.

Can anyone help?

The banks don't reduce MCLR as quickly so we don't see any change in our interest rate that quickly either. Even I am paying 8.35% for my home loan. The option is to shift to the new loan scheme in which the lending rate is based on the Repo Rate. Repo rate is what geta reduced/increased by RBI and one should see quick changes in interest rate on those loans. Even my bank has the option to shift to that loan scheme but I haven't checked yet how much it would cost to make the shift.

[Pancham]

Originally Posted by rdst_1

The banks don't reduce MCLR as quickly so we don't see any change in our interest rate that quickly either. Even I am paying 8.35% for my home loan. The option is to shift to the new loan scheme in which the lending rate is based on the Repo Rate. Repo rate is what geta reduced/increased by RBI and one should see quick changes in interest rate on those loans. Even my bank has the option to shift to that loan scheme but I haven't checked yet how much it would cost to make the shift.

Then why broadcast/post misleading advertisements saying 'MCLR customers are set to benefit'? I still don't understand the point.

Also, if you pay a fee and get your rate changed your interest component comes down right? EMI remains fixed. So that essentially means you loan period gets reduced marginally. Hope my understanding is correct.

[BigBrad]

Just thought of sharing my experience with an SBI car loan which was taken in 2015. I'm not sure if it was MCLR based or the scheme before that. But anyways, after I took the loan, the interest had reduced to some extent after around an year, but it was not getting reflected in my loan account. So I approached the branch from where I took the loan and they redirected me to the nearby SBI RACPC office. Initially, the staff there told me that my tenure will reduce and the EMI will not change. But I did not see any benefit in that coz I still pay the same EMI and if the interest rate increases tomorrow, the tenure will also increase accordingly. So I asked them if it is possible to reduce EMI and keep tenure untouched. They were a bit hesitant initally, but agreed after having some discussions and asked me to fill up a form. From the next month onwards, my EMI was reduced by 3k. So my suggestion would be to approach the RACPC office concerned with the branch from where you took the loan, they might help.

[hondafanboy]

In my case, I recently wrote to HDFC asking them to reduce the interest rate to 7.50 since they were giving new loans at that rate and if you 800+ Cibil. Turned out , I didnt have 800+ score so they said they can do 7.90% which I agreed to and had to pay 5k+ in fees.

[sunilch]

Originally Posted by Pancham

Hey Guys!

Can anyone please help me understand this "MCLR" business of SBI home loans?

Almost every time the bank reduces the interest rates every other website/media advertises how customers will benefit and the government boasts how the customers' EMI will go down and everyone loses their brains over how the rates have touched 7.XX%.

BUT, how come I don't see any change (read lower interest amount) in my account. First of all the EMI will never go down because it is fixed; it is the interest component that is supposed to reduce. On top of that, SBI charges this enormous switchover fee to change to other rates (e.g. New Lending Rate (EBLR)). I am very confused. My current ROI is still 8.4%. What am I missing here.

Can anyone help?

8.4% is not a bad rate given that the rates have come down only in the last 2 months. Perhaps your reset cycle is timed in such a way that your reset has not happened. All floating loan rates have a reset cycle. Earlier it was 1 year but recently the latest one has 3 months as reset cycle.

I am not sure if it is with MCLR/PLR/BPLR or whatever but the most recent one is different than what it was 4 years back when I took the loan. So in between I had two resets - one paid and one free of cost. New rates for my loan came in force this month as my reset was due. My loan is with ICICI btw.

So check what is your underlying rate mechanism and what is your reset cycle/frequency. If needed to switch, switch to the one that is currently in favor.

And yes, your tenure will reduce if your EMI stays the same but the rate reduces. This is the default. You can opt to change it when you ask them to do an off-cycle reset/rebase.

EDIT: I recently got a call from a BoB salesguy/representative and he told me that they are offering 6.85% for home loan transfers. If anyone is interested, they can check with BoB.

[shwetanshu]

Hello people, anyone here has any experience with Bank of Baroda for Home Loans in Bangalore? They have the lowest rate of interest as of now and giving a slightly higher amount which I need, therefore I am planning to go with them instead of Sbi/HDFC.