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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It’s home loan only. But I think it’s linked to repo rate only and not to MCLR. That’s why asking here.
Ignore Conversation but guide @leonardodavinci with respect to Conversion
My bad. 
Corrected the autocorrect !
KG
Thank You
+KG
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
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
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.
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!
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.
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%? 
…great !
This Hdfc bank home loan is always an issue. I had reduced it by 1.25% last year by paying conversion fee but again this year it is showing me the option to reduce by paying conversion fee. Why do they increase it and provide us an option to reduce by paying conversion fee, why can't the reduce automatically as they increase without asking us. For increasing it is linked to MCLR / Repo /etc but why while reducing they reduce 0.10 or 0.20 and also provide option to reduce more through conversion fee.
I feel like this is another scam to make money. In app / online they ask more money but in the branch it reduces half or more. Whole process looks like big scam but happening like deal. Currently i am paying 9.55 % and they are offering it to reduce to 8.80 % with conversion fee of 5900.
home loan interest rate is around 6.90 …how come ur current ROI is 7.90 …is it plot loan?