Dear Friends,

I am in process of short listing bank for applying Home loan. My project is approved by LIC Housing, PNB Housing, DHFL, India Bulls & Birla sunlife (I heard soon Union bank is coming on board as well). As per my understanding, most of the forum users have Home loan or are in process of getting one. Please share your experience (documents required, processing time, commission, agent tactics, bank attitude etc) and help me in deciding which bank is better.

I am stuck in between PNB Housing & LIC Housing.

Thanks
Om
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  • go for psu bank only. from private it is easy to take loan but difficult to repay the loan.
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  • one which gives you the money and never asks it back ;)
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  • Friends thanks for your comments.

    On a serious note, I would like to request all forum members to share their experience (good / bad) while applying for home loan and points to be kept in mind while going for a particular bank.

    Appreciate any help in this regard as I am in process of selecting bank for home loan. Choices for me are LIC Housing Finance & PNB Housing Finance. Only PSU bank for my project is Union Bank of India but their interest rate (floating) are already very high ~11.75% whereas PNB is offering 10.75% and LIC 10.80%.

    On a good note: RBI has slashed their PLR by 0.5% so we can expect reduction in interest rate in coming weeks.

    Cheers
    Om
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  • RBI cuts lending rate to prop economy, loans to become cheaper



    RBI on Tuesday slashed short term lending rate by 0.50% to 8%, a move that will reduce the cost of home, auto and corporate loans.
    PTI | Apr 17, 2012, 12.18PM IST
    MUMBAI: After a gap of three years, Reserve Bank governor D Subbarao on Tuesday slashed short term lending rate by 0.50 per cent to 8 per cent, a move that will reduce the cost of home, auto and corporate loans.

    The reduction in the repo rate at which RBI lends to banks, has been prompted by deceleration in growth and softening of inflation.

    The cut is aimed at spurring growth to 9 per cent levels, seen before the global financial crisis that began in 2008, Subbarao said while unveiling the annual credit policy here.



    "The reduction in the repo rate is based on an assessment of growth having slowed below its post-crisis trend rate, which, in turn, is contributing to the moderation in core inflation," the governor said.

    RBI has pegged the GDP growth rate for 2012-13 at 7.3 per cent. It is expected to be 6.9 per cent in 2011-12.

    After two consecutive cuts since January, the governor, however, retained the cash reserve ratio at 4.75 per cent.

    Subbarao, however, ruled out further reduction in policy rate in the immediate future citing persistent upside risks to inflation and possible fiscal slippages driven by higher oil subsidies. It expects the inflation to be around 6.5 per cent by March 2013. "It must be emphasised that the deviation of growth from trend is modest. At the same time, upside risks to inflation persist. These considerations inherently limit the space for further reduction in policy rates," he said.

    The decision is likely to prompt the banks to cut lending rates for home, auto and corporate loans, experts said. RBI has raised lending rates 13 times between March 2010 and October 2011 to contain inflation that had been hovering near double-digit. This had led to clamour by industry to cut rates and spur industrial and economic growth that has slowed down considerably during the past few quarters.

    In order to ease tight liquidity situation, Subbarao announced doubling the borrowing under the marginal standing facility for banks to 2 per cent of their deposits with immediate effect. It also permitted banks to borrow under the MSF even if they have excess government securities holdings.

    On the growth front, RBI expects FY'13 to be moderately better than the fiscal gone by. It has pegged GDP growth at 7.3 per cent, which is 0.3 per cent lower than the government projection for 2012-13. Growth in 2011-12 is seen at a 3-year low of 6.9 per cent.

    Even though spurring growth has taken the priority at the Mint Road, RBI continues to be worried about the inflation scenario, calling it as "challenging" due to the sharp spikes in crude prices and food articles in the recent months.

    Noting the moderation in manufacturing inflation, the governor pegged the annual overall inflation target at 6.5 per cent for FY'13 (which is 0.5 per cent lower than its projection for FY'12), saying the price rise will be range- bound through the year.

    Inflation was the key driver that guided the Reserve Bank to tighten money supply, and later hold rates during the past 36 months.

    The period also saw it inflicting 13 simultaneous hikes, by 3.75 per cent in repo rates over the 19-month period, making it one of the most aggressive central banks in the world.

    Apart from hurting investment activity, the rate hikes severely hurt the retail borrowers as higher loan repayments put household budgets for a toss.

    RBI made a conscious effort at placating this class by reiterating that banks should not charge prepayment penalties from home loan borrowers. It also announced to set up a working group to assess the possibility of having long-term fixed interest products which will not be exposed to interest rate changes.

    As for the bank non-food bank credit, the apex bank sees it growing at 17 per cent this fiscal, (marginally higher than that of FY'12), and deposits at 16 per cent.

    Besides, RBI has set-up a working group under K U B Rao to look into all aspects relating to gold loan by NBFCs.

    "There has been significant increase in loans by NBFCs against gold in the recent period. There are also complaints against some NBFCs that they are not scrupulously following proper documentation process and know your customer (KYC) norms, among others, in order to quickly dispose off the cases relating to gold loans," RBI said.

    Gold imports have also increased sharply, raising macroeconomic concerns, it added.

    The working group is expected to submit the report by end-July 2012, it added.

    RBI will undertake the mid-quarterly review of the monetary policy on June 18 while first quarter review is scheduled on July 31.
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  • Originally Posted by Om1981
    Friends thanks for your comments.

    On a serious note, I would like to request all forum members to share their experience (good / bad) while applying for home loan and points to be kept in mind while going for a particular bank.

    Appreciate any help in this regard as I am in process of selecting bank for home loan. Choices for me are LIC Housing Finance & PNB Housing Finance. Only PSU bank for my project is Union Bank of India but their interest rate (floating) are already very high ~11.75% whereas PNB is offering 10.75% and LIC 10.80%.

    On a good note: RBI has slashed their PLR by 0.5% so we can expect reduction in interest rate in coming weeks.

    Cheers
    Om

    Hi Om,
    I understand you concerns and willingness to know more about which bank to go for taking a home loan..as I have been to this period while buying my flat and I settled for IDBI as there was no PSU giving loan for my society when I purchased my flat..
    As you have 2 options now between PNB and LIC ..both are good banks to take home loan from..just check few things from both of them:
    1: ROI (both are same PNB is giving loan on slightly lesser ROI)
    2: Pre payement charges.. (the one giving you the flexibity of pre payment of loan amount without any charges is the one you should go for)
    if both of them has this feature then based upon different facilities like net banking facility to track your homeloan..lesser file/administration charges better customer care etc...
    3: I am not sure if you are aware..LIC reduce the ROI for home loan for its customers having any insurance/investment policy with LIC by atleast .25%..

    Hope it helps...let me know if you need any other info and I will be happy to help if I could :-)
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  • Originally Posted by Om1981
    Friends thanks for your comments.

    On a serious note, I would like to request all forum members to share their experience (good / bad) while applying for home loan and points to be kept in mind while going for a particular bank.

    Appreciate any help in this regard as I am in process of selecting bank for home loan. Choices for me are LIC Housing Finance & PNB Housing Finance. Only PSU bank for my project is Union Bank of India but their interest rate (floating) are already very high ~11.75% whereas PNB is offering 10.75% and LIC 10.80%.

    On a good note: RBI has slashed their PLR by 0.5% so we can expect reduction in interest rate in coming weeks.

    Cheers
    Om



    Go with LICHFL if everything else like ROI / Processing charges are same. However In general PSU banks are far better then any housing finance compnies.
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  • Originally Posted by rupinagarwall
    Hi Om,
    I understand you concerns and willingness to know more about which bank to go for taking a home loan..as I have been to this period while buying my flat and I settled for IDBI as there was no PSU giving loan for my society when I purchased my flat..
    As you have 2 options now between PNB and LIC ..both are good banks to take home loan from..just check few things from both of them:
    1: ROI (both are same PNB is giving loan on slightly lesser ROI)
    2: Pre payement charges.. (the one giving you the flexibity of pre payment of loan amount without any charges is the one you should go for)
    if both of them has this feature then based upon different facilities like net banking facility to track your homeloan..lesser file/administration charges better customer care etc...
    3: I am not sure if you are aware..LIC reduce the ROI for home loan for its customers having any insurance/investment policy with LIC by atleast .25%..

    Hope it helps...let me know if you need any other info and I will be happy to help if I could :-)



    Please do not treat PNB housing Finance as PNB. They both have very different norms for loan processing and PNB housing finance has a bad feedback.
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  • Thanks Rupin,

    For point no. 3 you have mentioned, I checked with LIC HF agent and he informed that there is discount on 0.25% on ROI but with astrix.

    a. Sum assured of all policies collectively should be more than 15,00,000.
    b. All policies should be under the name of loan applicant.
    c. 0.25% discount will be applicable only on floating ROI pattern.
    d. 0.25% discount will be applicable only on Actual rate of interest. Which currently is 14.4 (PLR) - 2.5 (discount) = 11.9%.

    For point no. 1 & 2, both PNBHF & LICHF are offering 0% prepayment charges and their ROI is comparable. LICHF is offering 0.3% processing charges, but i am concerned about long term consequences.

    My project is not under list of approved projects from SBI, Can i still get a loan from them ? If yes, what all docs are required.

    Thanks in advance.

    Cheers!!
    Om


    Originally Posted by rupinagarwall
    Hi Om,
    I understand you concerns and willingness to know more about which bank to go for taking a home loan..as I have been to this period while buying my flat and I settled for IDBI as there was no PSU giving loan for my society when I purchased my flat..
    As you have 2 options now between PNB and LIC ..both are good banks to take home loan from..just check few things from both of them:
    1: ROI (both are same PNB is giving loan on slightly lesser ROI)
    2: Pre payement charges.. (the one giving you the flexibity of pre payment of loan amount without any charges is the one you should go for)
    if both of them has this feature then based upon different facilities like net banking facility to track your homeloan..lesser file/administration charges better customer care etc...
    3: I am not sure if you are aware..LIC reduce the ROI for home loan for its customers having any insurance/investment policy with LIC by atleast .25%..

    Hope it helps...let me know if you need any other info and I will be happy to help if I could :-)
    CommentQuote
  • Originally Posted by Om1981
    Thanks Rupin,

    For point no. 3 you have mentioned, I checked with LIC HF agent and he informed that there is discount on 0.25% on ROI but with astrix.

    a. Sum assured of all policies collectively should be more than 15,00,000.
    b. All policies should be under the name of loan applicant.
    c. 0.25% discount will be applicable only on floating ROI pattern.
    d. 0.25% discount will be applicable only on Actual rate of interest. Which currently is 14.4 (PLR) - 2.5 (discount) = 11.9%.

    For point no. 1 & 2, both PNBHF & LICHF are offering 0% prepayment charges and their ROI is comparable. LICHF is offering 0.3% processing charges, but i am concerned about long term consequences.

    My project is not under list of approved projects from RBI, Can i still get a loan from them ? If yes, what all docs are required.

    Thanks in advance.

    Cheers!!
    Om


    Hi Om,
    You had mentioned earlier that your project has been approved by PNB and LIC both...but now you mentioned that your project is not approved from RBI..can you please explain it in details..
    As a matter of fact I have not dealt with both LIC and PNB...but I am sure dealing with both of them (if you are trying to get loan approved on your own and not through your builder) will not be a easy...but once everything is settled and you get loan from any of them ..in the long run you will come to know you cost effective it is to take loan from any PSU...
    also as mentioned earlier just check if they provide netbanking facility to monitor your home loan account online...as it become very easy to monitor the things online rather then visiting branch for every query...

    Anyone who has actually dealt with them should be able to give to more insight about it..
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  • Hello Rupin,

    Sorry, it was a typo.. actually I meant to say SBI.

    Please advise if I can awaile home loan from SBI, even if my project is not approved by them.

    Thanks

    Om


    Originally Posted by rupinagarwall
    Hi Om,
    You had mentioned earlier that your project has been approved by PNB and LIC both...but now you mentioned that your project is not approved from RBI..can you please explain it in details..
    As a matter of fact I have not dealt with both LIC and PNB...but I am sure dealing with both of them (if you are trying to get loan approved on your own and not through your builder) will not be a easy...but once everything is settled and you get loan from any of them ..in the long run you will come to know you cost effective it is to take loan from any PSU...
    also as mentioned earlier just check if they provide netbanking facility to monitor your home loan account online...as it become very easy to monitor the things online rather then visiting branch for every query...

    Anyone who has actually dealt with them should be able to give to more insight about it..
    CommentQuote
  • Originally Posted by Om1981
    Hello Rupin,

    Sorry, it was a typo.. actually I meant to say SBI.

    Please advise if I can awaile home loan from SBI, even if my project is not approved by them.

    Thanks

    Om



    Hi Om,
    As per my understanding,initially when a project is launched, it has tie up with few banks (these are mainly those banks from which the builder has taken loan from) and getting loan from them is easier...but it does not mean you can not take loan from any other banks...but in that case bank will ask for many documents like approval from development authority for the land on which the society is being constructed...approved site plan...and many other approved documents (these documents are already shared to those bank which has tie up with the builders so you do not need to provide if taking loans from those tie up banks)...and for providing thses documents you need to continously chase the builder and visit the bank on many occassions...once all the farmalities are done and bank finds that all the documents are in proper place they go ahead and give loan..but as mentioned earlier as you would be dealing with PSU it will be time consuming and full of hassles..but once all is set you will find it worth the effort spent...
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