Pre Home Loan Review is quite a tricky exercise. You have to judge and decide home loan provider based on a couple of pre home loan interactions. The problem is that you cannot apply with multiple home loan providers. For simplicity purpose, i will address home loan providers including HFC’s as Banks only. In my post, How i am responsible for my low CIBIL Score i shared if you apply with multiple banks then it will impact your CIBIL Score. With this context, Pre Home Loan Review becomes more critical.
When i availed home loan, i did this exercise of Pre Home Loan Review with top 5 lenders i.e. HDFC Ltd, SBI, LICHFL, ICICI Bank & Axis Bank. In this post, i will share my experience rather Pre Home Loan Review of top 5. I will keep it short, sweet and crispy. I will share the Pros and Cons of each home loan provider based on my personal experience along with a small brief on same. Let me also clarify that every borrower has a different experience with home loan providers. It also depends on the branch, employee, DSA, city etc. The Pre Home Loan Review shared by me is based on my personal experience and it is not universal. Some of the points are universal in nature and does not vary from branch to branch. For example, a home loan from HDFC is from HDFC Ltd not from HDFC Bank.
Pre Home Loan Review of HDFC, ICICI, LIC, SBI and AXIS
1. HDFC Ltd: The biggest misconception among all Home Loan borrowers is that Home Loan from HDFC is from HDFC Bank. Let me clarify, HDFC Bank Ltd and HDFC Ltd are 2 different financial institutions. They have separately listed companies on the stock exchange. They can be considered as sister concerns but there is no direct connection as such. HDFC Bank is governed by RBI and HDFC Ltd is Housing Finance Corporation governed NHB (National Housing Bank). Finally, i availed Home Loan from HDFC and has shared my detailed experience in my post, Home Loan Experience with HDFC Ltd. In this post, i am just listing down Pros and Cons based on my pre home loan interaction with HDFC
(a) Oldest Home Loan Lender in India with experience of more than 30 years
(b) Dedicated Network of Branches for Home Loan Servicing across India
(c) In-house panel of Lawyers for Legal Verification
(d) Online Access of Home Loan Account
(e) Offer lowest interest rates at par with SBI and ICICI Bank
(a) Very Poor Service by DSA & Branch.
(b) Hidden Charges for Loan Processing like 0.1% of loan amount as stamp duty for MODT. I was not aware of same at the time of pre home loan interaction. It inspired me to write a post, 15 Home Loan Hidden Charges.
(c) Call Center is good for nothing because agents don’t know anything about Loan Account. They will simply refer you to the Branch Manager from where the loan is processed.
(d) DSA’s don’t entertain you after collecting Processing fees cheque and No one picks up the phone in the Branch. The employees will not share mob no. During my physical presence in the branch, the landline was continuously ringing but no one was picking up. In a nutshell, you land in no man’s land after paying processing fees.
(e) Very Rude and not so Friendly Staff
(f) Very rigid in Loan Disbursement
(g) No response to mail queries or complaints
2. SBI Bank: I am sorry to day but from the body language of staff it seems that SBI is simply not keen to process home loans. It is visible from their approach towards the customer. Being a PSU bank, it’s an extra work loan for the bank employees. I called their Home Loan Manager of MG Road Branch in Bangalore through reference but he never sent any details despite numerous calling. As the trust factor is very high and my father was insisting on availing home loan from SBI. I collected a list of documents required by the bank from my friend and visited Marathalli Branch. The Loan Manager of the branch was amazed to see the complete set of documents in the first visit itself.
The loan manager shared mob no of a Lawyer who is on a panel of SBI for legal verification of property. Her office was in Malleshwaram (It is around 20 km from Marathalli). I called Lawyer and fixed an appointment for next day and i took a day’s off from office and visited her office. After reaching her office, she told that she is busy today and i should come next day. Next day again i took off from office and visited then she told that she is in the middle of some imp case discussion. She told me to come next day. At this point, i decided that enough is enough and i dropped an idea of an availing loan from SBI else i would have been searching for a new job along with home loan provider. My worst pre home loan interaction was with SBI. Despite all these hassles, borrowers still prefer SBI Home Loan. I shared the reasons in my dedicated post, Why do borrowers prefer SBI Home Loan?
(a) Public Trust as it is a PSU Bank.
(b) Offer one of the lowest interest rates due to the availability of cheap funds. In other words, you will always find SBI home loan interest rates cheapest among all.
There are no other visible advantages
(a) The biggest disadvantage is you need to do a lot of running around. Availing a loan from SBI is a very painful task. You should have a lot of free time.
(b) The loan amount is approved on the registration value. In my opinion, the direct fallout is that borrower cannot save on stamp duty and registration charges. Therefore, the borrower has to register on total consideration value.
(c) Loads of unnecessary documentation.
(d) Loan Account can be operated only from Home Branch.
(e) Lack of Professional Approach.
(f) I receive max queries on original property documents lost by SBI.
3. ICICI Bank: ICICI is struggling with perception problem that they levy unnecessary charges and Home Loan is costliest among all the home loan providers. Secondly, not many people are aware that ICICI Home loan is processed from ICICI Bank and ICICI HFC separately. On many occasions, the borrowers were under the impression of an availing loan from ICICI Bank. In reality, it was from ICICI HFC. Though the staff was proactive but were not able to answer the queries during pre home loan interaction.
(a) Dedicated Team and branches for Home Loan Servicing
(b) Largest Branch Network
(a) Negative People Perception and bad word of mouth
(b) Staff does not have proper information on Loan Products
(c) Focus more on Higher Loan Amounts
My pre home loan interaction was ok with ICICI Bank.
4. AXIS Bank: I approached their Call center and someone called me after 7 days. The pre home loan interaction ended prematurely. Still i thought of exploring this option before finalizing. DSA promised me that he will send details through the mail but i have not received any mail till date. After that i approached Home Lone desk at Marathalli Branch and executive was not able to answer even basic queries on Home Loan. The second dampener of pre home loan interaction. She took my mobile no. & assured me that her boss will call to clarify all the queries. After few days, i received a call from her boss and again he was clueless on most of the queries. Same day someone called from their main office in Bangalore and he was also not able to answer my queries. Based on my pre home loan interaction i decided to drop Axis Bank from the list.
(a) Lowest Processing Fees of just Rs 5000
(b) Recently they launched dedicated loan centers in select centers. When i availed home loan it was processed through bank branch only.
(a) Staff does not have proper information on Loan Products
(b) No dedicated set up for Home Loan
(c) Interest rates on the slightly higher side compared SBI, ICICI Bank, and HDFC Ltd.
5. LICHFL: Similar to HDFC there is a confusion among borrowers that home loan LIC means a home loan from LIC India i.e. insurance provider. The fact is that loan is processed by LICHFL. It is only promoted by LIC India. LICHFL is a listed company. I approached LICHFL office on Varthur Main Road and i found the staff to be good and very knowledgeable. LICHFL does not offer floating interest rates to new borrowers.
The rate of interest is fixed for the initial period. The real shocker comes when it shifts from fixed to floating. When i approached them, at that time Rate of Interest was 10.5% and LICHFL was offering an interest rate of 9.85% for first 3 months. Currently, the interest rate is fixed for two years. In fact after few days of visiting their office, i got a follow-up call. The only reason why i decided against LICHFL was higher interest rate when the loan is shifted from fixed to floating. Secondly, LICHFL does not have a strong legal check in place (Based on feedback received from my friends). Though pre home loan interaction was good but i was not comfortable with interest rate movement. It was more of a trap.
(a) LIC backed HFC
(b) Knowledgeable staff
(c) Faster Processing
(a) Younger member in Home Loan Providers
(b) Don’t mislead by the lower interest for the initial period. Interest rate increased by approx 1.5% to 2% when loan shifts from fixed to floating. LICHFL was not willing to declare the applicable spread when the loan shifts from fixed to floating.
Conclusion: In short none of the home loan provider is a clear winner based on pre home loan interaction. You can finalize based on your personal requirement & preferences. if you want to borrow from experienced lenders then it’s better to go with HDFC or ICICI, that has its own advantages. In case, someone would like to go ahead with Govt backed lenders then SBI and LIC are the two options available.
None of the home loan providers is perfect in their approach and it is more to do with employees you are interacting with. The pre home loan interaction may vary even between 2 different branches of same home loan provider in the same area.
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