I have a query regarding floating rate of interest being charged by the banks.
I took a Housing loan from deutsche post bank in the year 2009 @9%. and they started increasing their rate of interest from sept 2010 and now they are charging the rate of interest @12% to me. Even they have not given any information on increasing the rate to me. Last week, when i asked them what is the rate of interest i am being charged now they send me the repayment schedule.
As my loan was on floating rate of interest, i can understand that they have increased it. however, even in the peak times they offered the fresh loans to their customers not more than 11.25% and now they are offering fresh loans to their customers @10.5%.
I told them why you are charging a higher rate of interest to me when your existing rate of interest is 10.5%. however, bank is arguing that this is for the fresh loans. whereas, i am of the view that since bank is charging me the floating rate of interest, i should be charged as per their prevailing rates.
however, bank is reluctant to this and asking to opt for the conversion scheme by paying 1% as charge and they will convert my loan to 11% rate of interest.
I think this is totally wrong practice by the bank. Can somebody guide what should I do?
Waiting for the kind advise.
Naresh Kumar Jindal