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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Noida > What are the cons of applying loan from More then one bank other then processing fees
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Old August 3 2011, 04:32 PM   #1
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Icon18 What are the cons of applying loan from More then one bank other then processing fees

Hi All,

What are the cons of applying for home from more then one bank except losing the processing fees. Can their be any legal action / remark in CIBIL report if you get the loan sactioned and do not collect the disbursement. Also till what stage can u ask the bank to cancel the loan sanctioning
 
Old August 3 2011, 05:24 PM   #2
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Personally I am of the opinion that ther should be no need to apply to more than one bank at same point of time. First we should do appropriate reseach, choose a bank and make application after that. However from CIBIL point of view there will be no implication. Case is reported to CIBILonly after you have consented to the T&C of saction letter of the loan. You cannot of course consent for more than one home loan at same point of time.
 
Old August 3 2011, 07:38 PM   #3
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I would say, you must start the process with atleast three short listed banks...

Mind that, it is not the bank, it is the officer that you are working with matters the most. Some officer are professional and some are utter nonsense.

Hers is the tested process.

Talk to 3 or 4 banks

Ask for documentation requirements

Arrange the documents and submit soft copies to each of the bank

Ask them to verify the documents and confirm that all the documents are as per their wish list.

By this time, you already know whom you would like to work with... you know who is of your time and who are not.

Ask them to confirm positively that the submitted documents are enough for them to approve and disburse the loan.

They do any smart move, let them know that you have other options running in parallel, if they are not willing, lets not waste time.

Once you have gone through all these, you already know whom you would like to work with.

Don't bother too much about processing fees difference between different banks, the difference is peanuts in absolute term.

You pay processing fees only when you go ahead with a bank.

Unless you have no option, don't go for MNC banks or ICICI

If you know someone very closely in any nationalised bank (specially SBI) ... don't think anything else.

If you don't know and don't have spare time to waste then don't go for nationalised bank.

Once again, these are general observations.... it all depends on the bank officer you are dealing with.

Hope you got a clear idea.
 
Old August 3 2011, 08:53 PM   #4
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Very well suggested..it is all about the officer you are dealing with.
Another point that I would like to highlight here is that one needs to talk to friends/collegues etc who have dealt with a particular bank and understand how has their experience been. In case they can refer you to someone whom you know has been really good or someone who has simply been an idiot in dealing with them you know whom you can aviod.
 
Old August 3 2011, 08:58 PM   #5
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Thanks for the reply. My question is if I start the process in parallel from two banks, and at a later stage say No to One of those banks, what action can the bank take.

Quote:
Originally Posted by ondabhai View Post
I would say, you must start the process with atleast three short listed banks...

Mind that, it is not the bank, it is the officer that you are working with matters the most. Some officer are professional and some are utter nonsense.

Hers is the tested process.

Talk to 3 or 4 banks

Ask for documentation requirements

Arrange the documents and submit soft copies to each of the bank

Ask them to verify the documents and confirm that all the documents are as per their wish list.

By this time, you already know whom you would like to work with... you know who is of your time and who are not.

Ask them to confirm positively that the submitted documents are enough for them to approve and disburse the loan.

They do any smart move, let them know that you have other options running in parallel, if they are not willing, lets not waste time.

Once you have gone through all these, you already know whom you would like to work with.

Don't bother too much about processing fees difference between different banks, the difference is peanuts in absolute term.

You pay processing fees only when you go ahead with a bank.

Unless you have no option, don't go for MNC banks or ICICI

If you know someone very closely in any nationalised bank (specially SBI) ... don't think anything else.

If you don't know and don't have spare time to waste then don't go for nationalised bank.

Once again, these are general observations.... it all depends on the bank officer you are dealing with.

Hope you got a clear idea.
 
Old August 5 2011, 02:23 PM   #6
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Quote:
Originally Posted by kirtikr View Post
Thanks for the reply. My question is if I start the process in parallel from two banks, and at a later stage say No to One of those banks, what action can the bank take.
As long as you have not entered into any agreement with the bank... they can take absolutely no action.

At the very very extreme case, they can blacklist you for any future loan. But generally, most of the banks do not have that kind of robust system in place or that kind of manpower who diligently does their work.

It is very simple, at any point of time, you can go to the bank and say you are not comfortable with them..
or give some imaginary excuse
or simply say that you dropped the idea to buy the house now, you will get in touch with them when you are ready .. that's it.

Isn't it the same thing they (banks) always do with you?
 
Old August 5 2011, 06:39 PM   #7
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One quick question,
If we get loan approval/sanction only but do not go for disbursement....
Is processing fee still payable Or in other words, bank will not charge processing until I take disbursement.
 
Old August 6 2011, 05:03 PM   #8
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Quote:
Originally Posted by saihtul View Post
One quick question,
If we get loan approval/sanction only but do not go for disbursement....
Is processing fee still payable Or in other words, bank will not charge processing until I take disbursement.
You need to understand when the bank encash the processing cheque. Some clever one, like HDFC will first encash your cheque and then will issue approval letter .. disbursement is much later.

Some banks are not so smart ... or work more on trust ... these bank can encash processing fees cheque much later.

Legally, based on your loan application, you can stop your processing fees before the processing (Approval).

After the approval, you must have solid reason for stopping the payment (if not yet paid) or any refund. Bank can take action against you in case the amount involved is significant and they have the band width.

It is not ethical for you to stop payment after the approval unless there is a solid reason.

For this reason, many bank in overseas has something termed as "In Principal Approval" ... Indian banks are still unwilling to offer that ... so you have some right to play prank to them as well.

Hope this clarifies.
 
Old July 1 2013, 02:52 PM   #9
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My experience is when you ask Bank orally, they confirm that processing fee cheques will be deposited only after approval from applicant but in my case i have applied to Axix and HDFC and decided that will go for one who is providing maximum loan. Axis is ready with sanction letter and they immediately deposited processing fee cheques once sanction letter is prepared.
so if HDFC bank is giving me more loan i will go for HDFC but how can i recover the processing fee , it is Rs. 11500/- , i already told bank that my requirement is X amount and they are sanctioned me X-20% so this is the reason i am rejecting there offer now.
so how to get back processing fee ?
 
Old July 3 2013, 02:45 PM   #10
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There are 2 charges, one payable upon approval/sanction and another payable on disbursal. Generally the first one is approx 2500and once you take the disbursement This fees is adjusted in the agreed amount.
Bank representatives generally insist on the entire fees upfront, but you can negotiate to pay a part on sanction and rest on disbursement.
Coming to the point of any problem with applying to multiple banks, technically it can damage your credit score which cibil calculates because you will end up opening a line of credit which you cannot afford or need.
It is best to stick with one bank and negotiate well. The bank fees have a scope of 50% negotiation.
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