If you are thinking of going to Standard Chartered bank (SCB) for a home loan, I would strongly recommend that you do not sign on the dotted line in the home loan agreement.
I had taken the SCB home loan about 3 years back and I consider it the biggest mistake of my life. I had chosen SCB since their prepayment penalty clause appeared to be lenient -
1% of the principal if loan is closed within 3 years and NIL thereafter.
What happened a little later was that the bank changed the clause to read like the following:
2% of the principal if loan is closed within 5 years and NIL thereafter
Another thing I want to bring to your notice is that when the interest rates were moving down, the bank’s interest rate revision policy was to revise the rates every 6 months, but as soon as the rates began moving up the bank promptly decided to change the policy of revising interest rates to 3 months.
What did I do about the above?
Approached SCB’s Head, Service
Contacted my lawyer to see if I can challenge the bank
Contacted CORE - GOI affiliated body for consumer protection
What happened :
NOTHING
Why?
Because the bank makes you sign a clause which reads the following:
’’The bank can change the terms and conditions at any time.’’ This gives them the carte blanche to do whatever suits them.
What I plan to do now?
Get the loan bought over at 2% penalty (+service tax, of course) , since SCB has started given me sleepless nights.
So, if you are going in for an SCB loan, be sure the moment you have signed on the document and taken any disbursal you have fallen into the trap.