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HDFC charging 0.5% for reducing ROI for existing loan customers Raja | Loans and Credit Cards | 1 Reply

29
May
2013

When all other banks are reducing the rate of interests, HDFC is moving very slowly. It seems they are not at all interested to reduce ROI. SBI has given a blow to HDFC by reducing its ROI. Existing loan customers of HDFC are thinking and shifting their loan to SBI. Now, HDFC is feeling the real heat. When existing customers approaced HDFC for asking to reduce their ROI, HDFC is asking them to pay 0.5% on the loan amount so they can change the ROI to 10.25%. When asked why to pay 0.5% as we are existing customers they say it as conversion charges. This is really ridiculous. Can\\\'t HDFC do the same without charging 0.5% for existing customers? HDFC only wants to earn good money, they don\\\'t follow any ethics. They will be on top whenever they get chance to increase ROI. We also heard that it increased precloser charges from 2% to 3% making existing customers to stick with them by paying high ROI to them. They don\\\'t even inform any customers about the latest updates. How would an existing customer will know that HDFC is offering to reducing ROI by charging 0.5% on loan amount? HDFC has to change their mindsets and also all the existing customers should fight with HDFC for a fair business.

By IndianMoney Experts - 2013-May-29
Dear Raja, Kindly contact the HDFC Bank Customer Care on Toll free number 18003453333 in order to resolve your complaint.Floating rates have a certain base rate called index and a floating element called spread. In simple words you may say that base rate is the minimum rate, below which Banks cannot give you loans and spread is your final rate of interest after adding some % to Base Rate. Base rate may be fixed for all customers. But remember that you may end up either paying high interest rate or low interest rate based on the spread the bank charges to each individual. There is no cap on how much the spread should be on and above Base Rate. But charged spread rate need to be justifiable. Hence your banks may use this tool to charge you more by modifying spread as there is no regulation on this. However it has a drawback of uncertain monthly installments. Here spread cost covers risk costs, profits and bank charges. Existing customers do not get the benefit of reduced rate of interest and banks have their own explanations as they say that the cost of borrowing for existing customers is high therefore they cannot pass on the benefit of reduced rate of interest to existing customers hence they make the benefit available to new customers. Usually any banks do not avail any benefit to the existing customers. It can be new technique that HDFC is asking to pay 0.5% to get the benefit of low interest rate to the existing customers. It is not something that only the HDFC Bank does but even other banks also indulge in the same practices. This logic seems totally flawed. Unfortunately we do not have any other option but to pay the interest rate charged by them or a better option would be to take up the fixed interest rate. RBI has directed not to levy charges for foreclosure of home loans on floating rate interest basis, they cannot charge 2% to 3% on foreclosure.You can always refinance your loan from any other bank.If you feel you are cheated you can always lodge a complaint in the District Consumer Forum. You can always look up the website IndianMoney.com for your home loan needs.
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