You are falling into a big trap.. Think again!!! Taking home loan is a long term decision. So choosing which bank to take loan from is a very crucial decision. Especially if it is FLOATING loan, it is very important to choose the right bank .
Private lenders like ICICI have been cheating the customers again and again due to lack of awareness of people and lack of accountability in the system.
In the last 18 months, interest rates are continuously rising due to the monitory policy of RBI to control inflation/liquidity etc.But different banks have reacted differently to RBI actions.
These are the experiences me and my friends/collegues have had taken floating home loans over the last two years .
1. I took home loan from ICICI at 7% interest , tenure 15 years in 2005 Jun.
Current rate of interest I am paying is 11.75%.
My collegue had taken home loan from SBI at 7.75% interest, tenure 15 yrs in 2005 Mar. The rate of interest he is currently charged is 10.75%
Another friend of mine had taken home loan from Canara bank at 7.5% interest, tenure 15
yrs in 2005 Apr. The rate of interest he is currently charged is
10.75%
- One of my relative had taken loan from HDFC at around the same time as mine at 7.25% is now paying 11% (recently he got reduction of 0.25%)
The reason is simple. PSU banks (SBI, Canara etc., ) are required to adhere to RBI guidelines when
They hike the rates.
Example: recently (july 2007) when RBI hiked CRR rate, there was a clear guideline from RBI to not hike home loan rate, so there was no change in interest rate from PSU. But banks., but ICICI responded to this with rate hike of 1%.
So even if ICICI says it offers discount of 0.5% to 1% (as they are doing in DIWALI offer), its upto you to decide if you want to FALL INTO THEIR TRAP. My advise is even if you pay interest rate of 0.5% to 1% more in PSU banks, prefer them.
Also I request all people here to share their experiences to make these bankers more accountable.
- Raman Iyer.