I had applied for a personal loan from Citibank (couple of lakhs). The interest charges were comparable with any other finance company.
Citi had a local partner in Chennai, Shelters, that sells these personal loans.The deal was Shelters will take 1.5% cut for ’arranging’ this loan.I needed the money fast and so it was fine. The Shelters guy brought the forms to office and got it filled. He told me that the amount shd be released in a few work days.
I did not get the cheque posted/couriered to me even after 10 days. I called up Citi and they asked me to contact Shelters.When I enquired the manager in Shelters, she told me that the cheque is ready and I have to go and pick it up from their office :( It was ridiculous that I was asked to go to their office to collect the cheque though they took 1.5% of the amount as fees.After I gave her a piece of my mind, she agreed to courier it to my address. The cheque was backdated 4 days.
After 20 days or so, I called Citi to find out the process for repaying the loan as I wanted to repay the entire amount. They told me that I owe them interest starting from the backdated period in the cheque till the time my repayment Demand Draft is encashed by Citi.
So the way Citi calculates interest is always in their favor - even though their cheque was backdated and I did not encash it (due to the delay by Shelters and the cheque processing time) I had to pay interest for the backdated period.But when I repaid using a Demand Draft, Citi considered the date the money got transferred into their account as the loan closing date and I had to pay interest even for those days.I lost money both ways.
I have had numerous opportunities subsequently where I could have chosen Citi for financial transactions but have been avoiding them like plague.