HDFC HOME LOAN conversion query

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I recieved this message on HDFC Home loan app

“We offer you to reduce the rate of interest by opting for a revised spread in respect to your loan”

My current Rate of interest is 7.90 which will be reduced to 7.10 and the conversion fees is 5800 and outstanding amount in 20 lakh. This looks like a good step. My query is, What are pitfalls or Cons of this conversion.

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home loan interest rate is around 6.90 …how come ur current ROI is 7.90 …is it plot loan?

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It’s home loan only. But I think it’s linked to repo rate only and not to MCLR. That’s why asking here.

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Recently i have paid the same amount in SBI to reduce loan interest from 8.55 to 7.35

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no pitfalls/Con here.

Home loan interest can be as low as 6.8% but it all depends on the profile of customer (CIBIL score, banking relationship references etc)
Try to negotiate if it can be reduced bit more…you can also try to transfer your loan to some other bank if better rates are provided..but no harm in taking the current offer from HDFC.

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Sudarshan61 wrote:

no pitfalls/Con here.

Home loan interest can be as low as 6.8% but it all depends on the profile of customer (CIBIL score, banking relationship references etc)
Try to negotiate if it can be reduced bit more…you can also try to transfer your loan to some other bank if better rates are provided..but no harm in taking the current offer from HDFC.

Thank You for input. I will definitely try to negotiate.
+KG

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You can reduce interest rate with less conversion charges like 1180 and 2950 and you can enquire on reducing interest rate further.
Try sending them an email or enquire at HDFC Home loans branch. On app/online it always shows 5900

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Thank You @Naresh789 for the input. I will call the branch. It’s good to know that conversion fees and ROI, both can be negotiated. 

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leonardodavinci wrote:

Thank You ! So currently my home loan ROI is linked to MCLR , which will be converted to RRLR. Is it correct?

Yes. But ask the bank officials. They ll guide you better. 🙂🙂🙂 And please share what they said to you

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bikidas2060 wrote:

Yes. But ask the bank officials. They ll guide you better. 🙂🙂🙂 And please share what they said to you

Yes will call the officials and shall update here. Thank You

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Currently you can negotiate with HDFC @ following rates

Loan below 30L – 6.7%
Loan above 30L – 6.85%

I personally negotiated the same to 6.85% at 2950/- conversion fees

loan is funded by hdfc subsidiaries doesn’t linked to RBI

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Instead of paying 5800 to HDFC, better to move to other bank. because HDFC increase interest rate very fast. so by any change RBI will increase repo rate by even 0.10% (for example), HDFC will increase rate 0.20-0.30%.
even there was scenario with me that RBI was decreasing repo rate and HDFC was increasing.

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omsai wrote:

Currently you can negotiate with HDFC @ following rates

Loan below 30L – 6.7%
Loan above 30L – 6.85%

I personally negotiated the same to 6.85% at 2950/- conversion fees

loan is funded by hdfc subsidiaries doesn’t linked to RBI

Thanks for more specific inputs!

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Par_ wrote:

Instead of paying 5800 to HDFC, better to move to other bank. because HDFC increase interest rate very fast. so by any change RBI will increase repo rate by even 0.10% (for example), HDFC will increase rate 0.20-0.30%.
even there was scenario with me that RBI was decreasing repo rate and HDFC was increasing.

Other banks processing will be more. In my case nearly 10k. Also they force to purchase some life insurance policy. Also in last week SBI interest rate increased to 6.95 for female borrowers. It will be more than that for a self employed professional like me. Still, Thank you for suggestion.

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I did the same conversion but in Sep last year. I paid 1180 via chq to reduce rate from 8.55 (repo) to 6.90(mclr). ICICI bank.
You can also negotiate with your bank.

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senamit520 wrote:

I did the same conversion but in Sep last year. I paid 1180 via chq to reduce rate from 8.55 (repo) to 6.90(mclr). ICICI bank.
You can also negotiate with your bank.

Reduction of 1.65%? flushed…great !

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leonardodavinci wrote:

Other banks processing will be more. In my case nearly 10k. Also they force to purchase some life insurance policy. Also in last week SBI interest rate increased to 6.95 for female borrowers. It will be more than that for a self employed professional like me. Still, Thank you for suggestion.

by paying 10k if you get good rate will good bank, you just paid 4k more than just reducing in HDFC. also HDFC increase rate very fast than any other bank.
and regarding insurance, Axis bank asked one of my friend to buy insurance with loan. and he clearly said no after approval but bank gave him disbursement cheque.

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Par_ wrote:

by paying 10k if you get good rate will good bank, you just paid 4k more than just reducing in HDFC. also HDFC increase rate very fast than any other bank.
and regarding insurance, Axis bank asked one of my friend to buy insurance with loan. and he clearly said no after approval but bank gave him disbursement cheque.

Surely I will think about it ! Thank You!

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