[Resolved]  HDFC Bank — Prepayment charges for transfer of loan

I had availed housing loan from HDFC at the rate of 10.25%. Without informing me, they have increased to 11.50% and then brought down to 11% (the present rate).

As SBI is offering at 8% which is applicable both to the new loans and takeover loans, I had approached HDFC for the same.

To my shock, they have informed that penalty charges at the rate of 3% (along with Service Tax and educational cess on ST) will have to be paid by me if I am transferring the loan to another bank.

Earlier the rate was 2% and with the fear that lot of customers will be moving to Public Sector Banks, HDFC had unilaterelly increased it.

With the Supreme Court ruling against such pre-payment penalty, what is the recourse available to me?
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Aug 14, 2020
Complaint marked as Resolved 
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higher Interest rate being charged
I was thinking of balance transfer to SBI. Now HDFC has increased BT fess from 2% to 3%. All the customers at HDFC are unable to transfer thier loans now. We are paying 3 to 6 % higher rate of interest to HDFC than any other bank.

Government should do something in this direction. The Bank must be penalised for this.
Please join the following group:

http://in.groups.yahoo.com/group/hdfchomeloancustomers/

This is a group for all home loan customers from HDFC. This is a place for all o[censored]s to get together & share our experiences. It also provides us opportunities unite & take steps to protect our rights & interests.
Hi friends,
tranfer your home loan to LIC
only BANGALORE CITY pepole contact

ASHOK RAJ
LIC OF INDIA
BAGALORE-560001
MOBILE NO-[protected]
E-MAIL- [protected]@yahoo.co.in
Hi friends,
tranfer your home loan to LIC
only BANGALORE CITY pepole contact

ASHOK RAJ
LIC OF INDIA
BAGALORE-560001
MOBILE NO-[protected]
E-MAIL- [protected]@yahoo.co.in
Charging pre-payment penalty (a form of fore closure) is against the principles of natural justice.
______________________________________________________________________________

HERE"S THE LOGIC: The main concern for whoever that takes a loan is to repay it at the earliest. In fact pr-paying a loan is a positive thing. And therefore going by the principles of natural justice there is no case for PENALIZING a loan customer for getting rif of her/his debt earlier. And therefore (regardless of what forms /clauses they have got you to sign during the loan approval/granting process, a pre-payment penalty is NOT enforceable.

HERE'S WHAT HAPPENS: Lay consumers, like all o[censored]s here- take the word of an institution for granted. We fall for things like,
'this is the policy'
'this is made clear in the loan ducument that you signed'
'we charge this pre-payment penalty to everyone'
etc
and therefore, we hurt, crib and yet pay up- because we believe there is no option.

HERE"S WHAT YOU CAN DO:Even when you are in the process of applying for a loan, and when usually we check with more than one bank/financial institution- state very clearly that you are not going to pay any pre-payment penalty or fore closure charges (quote the Principle of Natural Justice that i just shared )- you will be surprised that the bank will not just agree, but even give you a committment to this effect in writing

I have done just that and I have a written committment from HDFC Limited that no prepayment/fore closure are applicable to me.

Since it is essentially not enforceable, even if you havent done this while taking the loan, please do not pay when you want to foreclose and refinance. I have done this for an earlier home loan (fore closure from GRUH Finance and refinance from SBI) and it has worked.

Essentially they are taking advantage of the fact that consumers are not aware that this clause goes against natural justice and is therefore not enforceable.

PLEASE SPREAD THIS WORD TO AS MANY FRIENDS/ FAMILY/ COLLEAGUES THAT YOU KNOW ARE CURRENT HOME LOAN CUSTOMERS OR ARE IN THE PROCESS OF TAKING A LOAN
Guys

pls tel me have u gone to consumer court ever for this problems?
I completely agree with the grouse raised. To add to it, i was surprised to see the attitude of the HDFC query resolution managers. HDFC is not sending any written communication to thier home loan customers on the change of rates and the impact it will have on thier exiisting relationship.

I was surprised to see thier reactions when demanded one from them. They said that the newspaper article pubished should suffice my anxiety. None of the market driven benefits have transferred to us. I would want all the customers of HDFC home loan to come together and demand an explaination from them on playing with our hard earned money.

Its a sheer exploitation on thier part on to thier loyal customers. In this dynamic market scenario where in each industry is keeping customer's interest in mind, an attitude like this will for sure make HDFC loose out its market share and also goodwill.

I for sure never let any known person of mine to go for HDFC relations.
The Reserve bank of India is supposed to direct all the banks including icici and hdfc and other banks not to charge prepayment charges on home loans and the National consumer Disputes Redressal commission's order in State Bank of india Vs.Usha vaid and another which was upheld by the apex court i.e, Supreme court of India. The RBI non complaince of this supreme court directive is depriving the consumers their right to chose a better product and the banks like icici are looting the consumers and they are tieing the rate of interest with individual banks plr rate which only goes to the interest of the bank and this is nothing but looting the middle class especially and the icici is collecting the blank documents and looting the consumers in lakhs and the RBI should direct the banks to be transparent in their rates of interest and should not collect foreclosure charges which are not rationale.
All HDFC home loan customer. Please join following group for all our common cause. We are already 600 people in this group.

http://in.groups.yahoo.com/group/hdfchomeloancustomer
HDFC - DONT GO FOR IT -

I had my worst decision going HDFC home loan as per my home builder's recommendation, because he said it was fast and easy.

1) HDFC takes at least 3 months to decrease the current RoI and that too with margin of .25% (point two five percent ) as per RBI's mandate, while other psu /private banks do it in short duration and in similar figure as indicated by RBI, and when rate goes up HDFC increases that instantly

2) They will never let you escape, by putting heavy loan transfer charges to other banks, now 3 % + service Tax + STT

3) If you delay in paying the EMI, they will charge heavy penalties 18%, 4% of emi amount depending on the payment method

4) They tie up with builders only to lure you on commission basis and would hardly come to you and disclose you all the ever-changing important T & C

sdfsdf — no action since 13-3-2009

As per your instructions, I had submitted loan application form alongwith all necessary documents on[protected] in your VIRAR branch office to Shri. Nimkar. I want to transfer my loan from ICICI bank to you. Loan amt. is Rs. 140000.But no action taken by HDFC till date.Please look into the matter and issue necessary instructions to your staff immediately.
Due to allegedly higher cost of funds HDFC Bank has increased my already HIGH rate of 12.50% on floating home loan to 13% effeective DECEMBER 2009. When I approached them for prepayment they first asked for 4% then reduced to 3% the prepayment charges ALSO ON ALL INSTALLMENTS PAID FROM NOVEMBER 2006 UPTO NOW!!!
Hi Guys

I took loan from HDFC Ltd. (not HDFC Bank) around June 2007 (on floating rate basis) and found in
these 2 years, I am paying always the higher interest amount/rate to HDFC compared to other
market player.

Begining of this year, I tried to transfer the loan to other bank but clever move from HDFC increasing the pre-payment charge (2 to 3 percent on a sudden fine morning) stopped me to transfer loan to other bank.

At the same time, HDFC gave us a good story. They said, presently the gap between HDFC PLR and our existing floating rate is 3% (meaning if the HDFC PLR is 14%, our home loan interest is 11%).
HDFC suggested us that now you can increase and ascertain this gap by 0.75 more by paying 0.5% of outstanding principal and hence we did it. So, currently we find that 14% is HDFC PLR, and our garunted deduction (from current PLR) is 3.75% and hence we are paying 14 - 3.75 = 10.25% interest.
I understand 10.25% might be equal to the interest rate offered by HDFC to their new home loan customer and accordingly they can show RBI the example that to stop the migration/transfer they are converting higher interest rate of the old customer at per to the new rate.

But EVEN THAN, what I can clearly see that ALWAYS HDFC interest rate is on higher side in market compared to other market players and hence what I can say it to AVOID HDFC for all future home loans.

Apart, I support the comments where it says that HDFC agents never disclose the important T&C.
HDFC people will call you in their office and will give a big agreement to sign. Whatever Agent has said earlier to you, may be a half truth where as the agreement has full truth - but unless you take a lawyer with you or you yourself is expert and read all that big agreement, you will never come to know about those finer details. Otherwise, you can demand the agreement copy before signing to read at your convenince and then go for a signing (and not "on the spot" attitude).

I had taken the loan from HDFC, Kasturba Road, Bangalore - the main reason was getting loan is easier in private bank with less paper work, but now I understand, the intial pain to get the loan from a govt or PSU bank will led my life easier and I could save many lakhs extra (what I am paying today to HDFC as high interest without any justification, any protest) and Govt is also silent on this.

I can write many more but I do not see any outcome writing here, so if anybody is going to consumer court or taking any firm action in interest of common people (HDFC Home loan borrowe), than please let me know and I would like to join that move.

Regards/Satya




signed (seating intheir office).


it signedI have seen the intiative from Nitin, the advocate to do
something against HDFC legally - but then after many e-mail exchange in
April, suddenly everything seems stopped now, what happened ?
Regards
Satya
How HDFC harashing me to give Amortization statetement. Fist time I asked the on 15-MAR-09. Till today I did not received the statement. India is having Law but they are not in force.

Query : ASHOK BHATTACHARJEE T4/7/1 RUCHIRA RESIDENCY PURBACHAL, KALITALA MAIN ROAD KOLKATA - 700078 CELL - [protected] Date : 15-MAR-09
Reply : Replied By : Replied Date :

Query : Requesting amortization statement on line as you used to give us. You have removed it recently. Why? It smells fishy? Regards Ashok Date : 05-MAR-09
Reply :
Dear MR BHATTACHARJEE ASHOK,
Thank you for posting your query on our website.
Answer : Amortization Schedule is currently under review, it might take some time.

Query : We used to get Amortisation statement in your web site. Presently it is removed from your site. As a customer I am having rights to see my present dues. I wish you are also doing fare business, please allow us to see it in your site. Regads Ashok Date : 15-MAR-09
Reply :
Dear MR BHATTACHARJEE ASHOK,
Thank you for posting your query on our website.
Query :
We used to get Amortisation statement in your web site. Presently it is removed from your site. As a customer I am having rights to see my present dues. I wish you are also doing fare business, please allow us to see it in your site. Regads Ashok
Answer :
Amortization Schedule is currently under review, it might take some time.
Replied By : SMITA Replied Date : 16-MAR-09


Query : I would like to have amortization schedule for loan account. I had already email you for the same for two times. Wrtiien application have been given to you at your Jeevandeep branch for two times. I will stop paying EMI until I get this. Last post dated cheque you are having with you is for this month. Regards Ashok Date : 19-JUN-09
Reply :
Dear MR BHATTACHARJEE ASHOK,

Thank you for posting your query on our website.
Query :
Answer :
It has already been despatched earlier, now resent once again.
Replied By : SMITA Replied Date : 23-JUN-09

Thanks & regards
Ashok
I am in the same boat and was surprised to learn that there were pre-closure charges (I was led to believe that there wasn't any at the time of loan) and that too as high as 3%. I am switching to SBI as I have to take a larger loan - BTW, the SBI loan process was not as hard as I thought it would be. When HDFC knew that I was going to SBI, they offered to refinance my existing loan as well as give me a new loan for 9.5% (their current rate). They do this for new customers, while I have been paying 11+ percent (and 12+ in between) for almost 3 years! If I was not trying to move, they would have not offered this. I spoke to their branch manager at length and he was trying to convince me that they are forced to do this to keep customers. He said that other banks were stealing their customers! He should know better. I don't think HDFC is really customer focused, they just want to keep getting rich by exploiting their customers.

Thanks,
-Sunil.
Dear Guys,

Just to brief you, my home loan file was logged initially from Basheerbagh branch and the sanction letter was issued by the bank to approach Taranaka branch. The legal advisor named Mr. Sainath (one of the legal advisor), who sits centrally at Basheerbagh branch initially scrutinizes all the legal documents and in turn will clear the files for further processing. On initial scrutinisation of the documents, the loan sanction mail was released by the bank which is annexed below for your reference. The details of the bank person who is coordinating with me so far in this processing is also mentioned below for your reference.

The loan was sanctioned by the bank at a value of Rs.1500/- per sq.ft., which was based on the completion of the builders work in the project. On pressurising the builder from my end, the works were subsequently completed by him and asked the bank to do a revaluation. While again considering the request, the bank has asked to relogin the file to complete the scrutinisation and to do the revaluation. On second scrutinisation, the bank has asked the builder to produce some more legal papers and an opinion from a lawyer. The same was also submitted by the builder couple of weeks back in this regard. When I was enquiring the same with the bank coordinator, I came to know that the Audit was going on in the last week and the legal advisor's action was very lethargic, which in turn is due to the consequences between the builder and with him.

I have also paid an initial token advance of Rs.75000/- to the builder and informed that the balance amount will be cleared from my end only on clearance of the legal papers. Builder having faith on me and hope that the loan will clear, the builder has completed most of the works in my booked flat (except the flooring, doors fixing and painting). As per today's latest conversation after our call with the coordinator and the builder, I heard that the legal advisor is taking the subject to the bank's committee tomorrow to clear the same. But, I am totally blurt in the picture and completely depend upon the words of the builder and the bank co-ordinator.

Also, would like to know the basis on which the bank has confirmed and released the initial sanction letter after scrutinising of the documents.

Having putforth all the details, could you please help me out by knowing what is happening at the bank's end and what is their actual issues or concerns in this regard.

Builders Name : Anup (91 [protected])
&
Vijay Mohan

Project Details : Flat No. 504, Royal Plaza, Rockview Apartments, Safilguda, Hyderabad.


Bank Co-ordinator introduced by the Builder
Mr Gurumurty Kuntulu : Credit Co-Ordinator
HDFC Sales Pvt.Ltd.
(A Group Company of HDFC Ltd)
Mobile : NO : [protected]
E-mail : [protected]@hdfc.com
www.hdfcsales.com


--- On Fri, 3/7/09, [protected]@hdfcindia.com <[protected]@hdfcindia.com> wrote:

From: [protected]@hdfcindia.com <[protected]@hdfcindia.com>
Subject: HDFC LOAN APPROVAL - File No:[protected]
To: [protected]@yahoo.co.in
Cc: [protected]@hdfc.com
Date: Friday, 3 July, 2009, 4:45 PM

Dear MR HARIHARAN SRINIVASAN,

It is a pleasure to have you as our valued customer.

We are happy to inform you that your application has been approved in principle for an amount of Rs.1236000.

A Letter of Offer containing broad terms and conditions is being sent to you.

Kindly contact us for early completion of formalities relating to disbursement.

May we inform you that the necessary documents are to be submitted by you directly to HDFC.

We look forward to hearing from you.


Yours faithfully,


B VENKATESWARA SARMA
__________________________________________
HDFC - Customer Care
TARNAKA : 27006950
www.hdfc.com


Thanks in advance.
Sir,

This is for your infomation please

Dear Sir,

As per the term of the loan Agreement, the PEMI / EMI payments are to be made regularly on a monthly basis within the month for which PEMI / EMI are becomes due, without any notice or reminder from HDFC. In case, failing which the additional interest charges is accrued @ 18 % p.a. on the delayed payment alongwith incidental charges.

In your case there is a total outstanding of Rs. 34, 062/- towards (EMI Rs. 25, 272/- + Additional Interest Rs. 6840/- & Incidental charges of Rs. 1, 950/-) as on 31st July'2009. As a very special case we have agreed to settle your loan account by paying Rs. 31, 000/- by 31st of August'2009.

Thanks & Regards

Amanpreet Singh
HDFC Ltd.
Core 6-A, 5th Floor,
India Habitat Center,
Lodhi Road, New Delhi - 110003
[protected]
[protected]


[protected]@iocl.co.in
08/24/2009 01:53 PM
To [protected]@hdfc.com
cc [protected]@hdfc.com, [protected]@hdfc.com
Subject RE: Loan A/C No. 4077309








Sir,
Received with thanks for your system generated loan accounts statements. As per your statement I had paid Rs.2, 58, 837/- approxmetly w.e. f 1997 against the loan taken of Rs.1, 30, 000/- My closing balance is Rs. 25272/- after repayment of the above amount. Closing balance of Rs. 25272/- is showing. I am unable to pay interest and pIenty. so humbly request to you please wave of my interest and accept the closing balance of Rs.25272/-. A line of confirmation is solicited.

Regards

Shyam Lal



[protected][protected][protected][protected]

From: Amanpreet Singh [mailto:[protected]@hdfc.com]
Sent: Monday, August 24, 2009 11:39 AM
To: [protected]@iocl.co.in
Cc: [protected]@hdfc.com; [protected]@hdfc.com
Subject: RE: Loan A/C No. 4077309


Dear Sir,

We have send you the system generated loan accounts statement, pls confirm if you have recd.

Thanx & Regards

Amanpreet Singh
HDFC Ltd.
Core 6-A, 5th Floor,
India Habitat Center,
Lodhi Road, New Delhi - 110003
[protected]
[protected]

[protected]@iocl.co.in
08/24/2009 09:44 AM

To [protected]@hdfc.com
cc [protected]@hdfc.com, [protected]@hdfc.com
Subject RE: Loan A/C No. 4077309
I had availed housing building loan from HDFC at the rate of 10.25%. Without informing me, they have increased the rates of interest and charged rate of interest of RS 14% .
Details of the loan:

LOAN AMOUNT : 130000.00 ROI : 14.00% CURRENT EMI : 1944.00

I had paid the instalment from March 1997 to July 2007 of Rs.1944/- per month the total amount paid from March 1997 to July 2007 of Rs. 2, 58, 837 against the loan taken of Rs.1, 30, 000/- only. I shocked when they threatening me to repay the loan. After paid the huge amount they showing the outstanding amount / Closing balance 25272.00 and they also charged the additional interest / incidential charges and demanding Rs. 34, 062/- as per their mail received from hdfc bank.

As per the term of the loan Agreement, the PEMI / EMI payments are to be made regularly on a monthly basis within the month for which PEMI / EMI are becomes due, without any notice or reminder from HDFC. In case, failing which the additional interest charges is accrued @ 18 % p.a. on the delayed payment alongwith incidental charges.

In your case there is a total outstanding of Rs. 34, 062/- towards (EMI Rs. 25, 272/- + Additional Interest Rs. 6840/- & Incidental charges of Rs. 1, 950/-) as on 31st July'2009. As a very special case we have agreed to settle your loan account by paying Rs. 31, 000/- by 31st of August'2009.
Please look into the matter and settle the account.
banks r tomake profits not charity, so before taking loans u should think .
Thanks guys for this info, I have planned go for home loan which bank do you people feel would be better choice.

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