Hi All,
I wanted a loan for constructing my house in Chennai. But I was working in Bangalore. I found that home saver from standard chartered was suiting my requirements well. Especially because, I can park my savings there and withdraw it when ever I want. The representative came to my company in Bangalore and promised to help me with the process.
For the ones who are yet to apply a loan, The loan process has 2 steps.
Sanction for the loan amount at a particular interest. This is purely based on your income (and residence check). This will have a validity period (usually 30 days)
Actual evaluation of the property you are buying and subsequent disbursement of the amount. This step is executed at the bank branch closest to the property.
Though both of them are done by the bank, they seem to be very independent. If the bank delays in the second step, and the validity of the sanction expires, The bank would ask you to pay your processing fee again and start all the way from step 1. This is so stupid, but I think this is how all the banks torture their customers.
The first step - getting the sanction went really smooth. I got the loan sanctioned (for both land and building) at a low interest rate, fixed for 20 years. As you would expect, the trouble came during the land verification. The verification happened in chennai and these guys dont have a good link with the chennai office. Till 2 weeks before the registration, I was given a very rosy picture by my representative. I left my fathers number (chennai) with the bank for any queries about the documents. But they never used that route, if they find something missing in the docs, they will leisurely let the bangalore office know and from there, I would come to know. I have to call my father and arrange for the docs to be given to the bank. Since the representative was available only in bangalore, my father got to run to the bank every time.
Lesson 1: Get your loan in the place of your property, not in the place of your work. Because, step 1 does not need much of bank visits, but step 2 certainly is more painful and you would benefit from having a representative helping you in it.
step 2 took so long that I have to register the land with out getting the loan. Finally, after another month the land was verified. I was really pissed off at this moment. My representative (Benny) and his manager (Raghu) started showing signs of disrespect. They never returned calls and always cut my call away. Also the sanction letter had gone void. So, I was forced to pay my processing fee again. And got my loan re-sanctioned. But this time with higher interest rates and only for the land part. The interest rate at this time was so high that I settled for the floating rate. I spoke to his manager, but he told that when ever you start building the house he will top-up the loan to include the building cost as well. I went for it as I didnt want to go to another bank and start the land verification all again.
Finally I got my loan check. The problem sprang up when I wanted to start construction. Raghu told me that I got to pay processing fee again for doing the top-up. I felt being cheated. But again I dont have a choice, for the land documents are any way with the bank and I cant go for construction loan else where. But I was very certain that I am not going to the same guy again. By this time, Benny had left the company and I was always talking to his manager Raghu. I spoke to a standard chartered rep in chennai, vinoth. He seemed to be a very nice guy and I applied for my top-up in chennai. He took care of transferring the loan from bangalore to chennai and worked with my father in evaluating my construction etc. Though I have not got my full construction loan amount disbursed, I am quite confident that vinoth would help me through fully.
At the end of it, I have paid the processing fee 3 times. Twice in bangalore (for initial, and after expiry) and once in chennai (for top up).
Lesson 2: Beware of Raghu and his team.