Few weeks left to refinance!

With two home loan EMIs running, almost no news about home loans escapes ones eyes. With most banks announcing that they will withdraw the ‘teaser’ schemes, I finally decided to get one of the loans refinanced. Now my current lender, India’s largest private bank, was never good to me. I had a great deal from them in 2008 with a huge 2.5% discount to their benchmark rate. But their new customers today are getting 4% discount on benchmark. And teaser rates on top of it. Net-net I will always pay 1.5% more than others, forever. So refinance was inevitable and I was just wondering what is the right time.

The teaser rate is just the right incentive for refinancing. I am paying 10.25% right now, and will save the 2.5% odd total costs of refinance in 15 months. And then I will have a discount rate which will be better than past customers.

Which bank should I go with? Certainly not private banks this time, except say HDFC. All others private banks just milked borrowers by arbitrarily increasing the benchmark rate and yet passing higher discounts to newer customers. And also the private banks are giving smaller discounts to loans above 30-50 lacs, even when their teaser rates are comparable to the public sector banks.

One used to worry about customer service from PSU banks, but now there are banks like Axis, IDBI and others who are giving equally good service.

So let me do the bold thing, get out of my comfort zone with the fancy banks, and save some money!

Meanwhile, RBI is finally planning to deliver justice for all the heartburn I have had with increasing EMIs. It is asking banks to pass on discounts to existing customers as well. It even asked banks ‘Why can the existing customers be ‘teased’?’ Again, its anybody’s guess whether it will be Private banks or PSU banks who will try to bypass RBI guidelines to make quick bucks!

No related posts.