Benefits of Applying Online
When Banks Compete, you win.
Apply for a Home Loan at ApnaPaisa and we will match your requirements with the best offers from our network of over 400 service providers. We will get a maximum of five providers to compete for your business. WHEN BANKS COMPETE YOU WIN. You can then decide which home loan is best for you based on:
- Lowest Interest Rate
- Lowest EMI
- No Pre-payment charges
- Lowest Processing Fees
- Maximum Eligible Loan Amount
- Mandatory Documents Required
- Lowest Processing Fees
Or any other factor that is important to you.
Negotiating Tips
1) If you have a good credit record and your income is sufficient to justify the loan you can negotiate on interest rates. You can also try and get Processing fees or legal or valuation fees reduced or completely waived.
2) If you go for a floating rate loan then pre-payment charges are not payable.
3) When interest rates are high and are expected to go down you should go in for a floating rate loan as it makes no sense to lock into high fixed rates or the so called Dual rate loans where rates remain fixed for a couple of years before shifting to regular floating rate loans. Please review this decision at least once every 6 months
4) Take term insurance and critical illness and accidental disability policy for the full loan amount to make sure you or your loved ones don't have to worry about loan repayment should you die or are disabled due to a critical illness or accident. You cannot be forced to buy this policy from the insurance company chosen by the lender - you should choose your own insurer.
Is the base rate more transparent than the BPLR?
Base rate is more transparent than BPLR.Base Rate recommends 1-year retail fixed deposit rate of bank be the base rate for that bank and floating rate loans be pegged with reference to such a base rate.Harsh Roongta
24 Nov 2009
The regulator (RBI) has been concerned about making credit pricing more transparent for quite some time now. One of the reasons being the wide spread complaints by home loan consumers that lenders are quick to raise BPLR when the regulator raises signalling rates (Bank rate, Repo rate, Reverse Repo rate or other rates such as CRR and SLR) but lag behind considerably when the regulator drops these rates.
The working group constituted by the regulator for this purpose has submitted its report and RBI's final decision is awaited. This article seeks to examine if the Base Rate system recommended by the group is more transparent than the existing BPLR system.
The short answer to that question is Of course Yes. The Base rate system is definitely more transparent than the existing BPLR system. But there are some non-transparent aspects to the fixation of the Base Rate, which needs to be highlighted.
In simple words the Base Rate system recommends that the 1-year retail fixed deposit rate of a bank (after making certain adjustments) be the Base Rate for that bank and that the floating rate loans be pegged with reference to such a Base Rate. The 1-year retail fixed deposit rate for a specific bank is easily and publicly available and to that much extent it adds considerably to transparency. It is the adjustments, however, that are based on not so easily available information as well as complex to calculate. For the adjustments the consumers will still need to depend on the concerned bank to make them properly. Having said that any bank will find it really tough to explain why the Base rate has not dropped if it decides to drop its 1-year retail fixed deposit rate.
Some other issues with this mechanism also need mention.
First, not a single bank follows the existing regulations requiring floating rate loans to be priced with reference to a suitable external benchmark. In fact, if this regulation is followed there is no need for any change in the regulation at all. This leads to justifiable concern among consumers whether any new regulations will be followed by the banks or whether the regulator will enforce any regulations that it chooses to notify in this regard.
Second, the group has left vague the applicability of the new Base system to existing borrowers by stating if the existing borrowers want to switch to the new system before the expiry of the existing contracts, in such cases the new/revised rate structure should be mutually agreed upon by the bank and the borrower. Here everybody will agree that it is nearly impossible for a single borrower to get the bank to agree on something like this. It would have been better if the modalities of applying the new system to the existing borrowers had been spelt out clearly.
Third, of course is the enforceability of any new regulations. Any regulations to be effective needs to be monitored by the regulator and transgressions need to be penalised and repeat offenders need to be punished.
Let's therefore hope that if the regulator chooses to accept the group's recommendation then it will also be enforced vigorously.
Amen!