Every loan customer should thoroughly understand the product & understand whether it is tailor made for him/her. HDFC as a highly esteemed organisation always educates the customer about it.
The writer is saying the same thing again and again.
Writer is presumming that interest rate will cool doun in 6-12 months. Even RBI cannot garuntee such predictions.
Taking a contrarian view is OK but write your assumptions also. The diff bewteeen so teaser interest rate and flaoting rate is .25% . Does such teaser reaaly qualifies as teaser ???
The writer of the article should look at ground levels. The economy / inflation is directly linked to petrol. Do you think petrol prices will come down? Then inflation will remain up, rentals will keep going up, real estate and food prices will keep going up. How do you really expect interest rates to come down then? It will never come back to 8%. Before liberalization we had interest rates of around 15%. So at the best the interest rates will hover around 10 - 12% in near future. So teaser rates are good for you to at least benefit for the first 12-18 months. After that anyway its floating, so if either way you are at par with market.
I am taking loan in 2005 at fixed with 8% from IDBI Home finance. After three year thay chnged intrest rate 8% to 11%.After investegation banks told fix rate is applicable for three years only. Please advice.
Thanks for a detailed writeup. Though, the case is good for most of the loans taken in India, let me tell you how people can get benefit out of such schemes.
I had taken a Home Loan of 80 Lacs at 8% Fixed for the 1st year and 9% fixed for the next two years from SBI for a house in Gurgaon. I am currently in year number 3 with the loan and plan to pre-pay atleast 50 Lacs by the time the loan tenure enters the 4th year. Thus by the end of the 3rd year, my outstanding balance will be less than 25 lacs and even if SBI sets the interest rate at 11.5% I pay that only for one year - before I come out by foreclosing the loan in the fourth year.
Thanks for a detailed writeup. Though, the case is good for most of the loans taken in India, let me tell you how people can get benefit out of such schemes.
I had taken a Home Loan of 80 Lacs at 8% Fixed for the 1st year and 9% fixed for the next two years from SBI for a house in Gurgaon. I am currently in year number 3 with the loan and plan to pre-pay atleast 50 Lacs by the time the loan tenure enters the 4th year. Thus by the end of the 3rd year, my outstanding balance will be less than 25 lacs and even if SBI sets the interest rate at 11.5% I pay that only for one year - before I come out by foreclosing the loan in the fourth year.
Re: Teaser Loan
by prashant on Sep 20, 2011 01:33 PM
Good going bro. its really a great achievement to repay such a huge loan in such small duration. I am feelingn jelous on you :-)
At the outset one should thank for the analysis done by the writer as also Banks's schreudness. Govt. leaves the common middle man on their fate , who are notintelligent enough who understand the Banks' tricks. It is really pitty our Prime Minister is so called Financial Wizard but not in position to think for the middle class people( Seeking a loan of 10 to 20 lacs loan) who are having dream of having their own Roof
