Sudhir Dharan (Manager) 14 August 2014

Home loan interest rate

Hi All

I have a home loan account running with Centralized Bank since Oct 2008. The loan was taken against floating interest rate.

It is noticed that the interest charged against my account is way above the base rate and constantly fluctuating. It started with 3.5% margin and has been fluctuating around 4-6% (margin) percent currently. Am pasting a graph which would provide more details.

Inline image 1

Queries

1. Please guide if there is any issue here and what further can be pursued.

2. Would like to understand my options by keeping the existing HL with the bank.

3. Please guide me as to how I can approach the current bank and push to get more transparency and better deal.

Thanks in anticipation

Regards

Sudhir

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2 Replies

T. Kalaiselvan, Advocate (Advocate) 19 August 2014

If you have agreed for the floating rate of interest, you are liable pay the same whether you like it or not or make an application to the bank for re-structuring the loan. There is no illegality in it.

RAJU O.F., (Advocate) 20 August 2014

You may request the bank to provide the rates of interest charged from the commencement of the loan, to verify the correctness of the bank's calculation. Floating rates are fixed at Base Rate of the said bank during the relevant period plus a fixed rate of interest assesed to your a/c. You can ascertain the base rate, which is a floating rate fixed on a particular day for that bank. If you are not satisfied with the rate charged by the bank, y9ou may try to switch over to another bank or F I at better rates/facilities.