Beware home loan takers
Beware Home loan takers
If you want to take a home loan everything is stacked against you as there are no norms to govern these companies. The largest segment of retail loans in this country is home loans and it is also seen as a major driver for the economy. As it has an impact on real estate, construction, steel and cement all core industries.
But home loan companies including the biggest ones in the country still take their consumers for a ride.
1. Interest is deducted first from the EMI typically in the ratio of 80:20 for many years. The same never happens with a corporate loan, where interest and principal amount deduction are clearly negotiated. There is not central consumer body willing to negotiate for on the behalf of Indian home loan takers. Plus the RBI which is supposedly the regulator for this segment does not ever want to intervene on behalf of the consumer. Therefore, even over a 10 year period you may still only end up paying 30% of your principal amount but 100 per cent of the interest amount.
2. Every home loan company charges you a processing fees based on percentage of home loan amount. As if the amount of work will go up with every Rupee that is added to the home loan. BTW this fees is negotiable if you are wise enough to squeeze the agent selling the loan to you. If you do not they will charge this fees plus they will add any fees that they have to pay to lawyers to get the property vetted. This is grossly unfair to consumers.
3. Everything in the contract is stacked against the consumer. Even if you are on variable home loan you have to pay a charge if you want to shift to a downward rate. If the interest goes up there is no charge but you rates are automatically shifted up.
I think the time is near when home loan companies should stop skimming and scamming their customers. more
If you want to take a home loan everything is stacked against you as there are no norms to govern these companies. The largest segment of retail loans in this country is home loans and it is also seen as a major driver for the economy. As it has an impact on real estate, construction, steel and cement all core industries.
But home loan companies including the biggest ones in the country still take their consumers for a ride.
1. Interest is deducted first from the EMI typically in the ratio of 80:20 for many years. The same never happens with a corporate loan, where interest and principal amount deduction are clearly negotiated. There is not central consumer body willing to negotiate for on the behalf of Indian home loan takers. Plus the RBI which is supposedly the regulator for this segment does not ever want to intervene on behalf of the consumer. Therefore, even over a 10 year period you may still only end up paying 30% of your principal amount but 100 per cent of the interest amount.
2. Every home loan company charges you a processing fees based on percentage of home loan amount. As if the amount of work will go up with every Rupee that is added to the home loan. BTW this fees is negotiable if you are wise enough to squeeze the agent selling the loan to you. If you do not they will charge this fees plus they will add any fees that they have to pay to lawyers to get the property vetted. This is grossly unfair to consumers.
3. Everything in the contract is stacked against the consumer. Even if you are on variable home loan you have to pay a charge if you want to shift to a downward rate. If the interest goes up there is no charge but you rates are automatically shifted up.
I think the time is near when home loan companies should stop skimming and scamming their customers. more
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View all 7 comments Below 7 comments
....true ...though almost every lender wants a Return on Investment made...but this Lending does not have any transparency ...and sticking to rules....but make their own balance sheet very attractive as possible. 1 more
Jul 11
HDFC does not change the rate of their own....you have to apply and pay for the same. there is no system of online payment for this. you have to attach one revenue stamp too. What a system Sirji ! SBI does not transfer the HL just like that.....you have to apply as if you are taking new HL.....they will come for inspection and what not....in case of rejection they will not returned the 1 kg paper set to understand where u made the mistake......Paper tiger. more
Jul 10
If any body could educate me i will be great ful to them. How EMI is calculated and why interest is taken first and later principle. If i repay the loan amount before the end of contract do i loose money becuase interest is taken more and principle is taken more. While repaying the loan amount before the contract i should pay what ever amount is due in the account statement i should pay more
Jul 08
We must express ourselves and protest for this exploitation by home loan companies. Raise this issue in various forums. Send post to PMO. more
Jul 10
It most is unfortunate that Govt agency Consumer Affairs is watching all this exploitation of customers by Home Loan Companies. Even media does not discuss this subject , they will do cow , masjid , Mandir, religion , etc. more
Jul 08
