Hi Sir,
I got home loan changed from base rate to MCLR last year in July .So interest rate changed 9 to 8.65.
It was 8.65 until June 2018 however now its 8.9 which seems pretty much high.
My friends who have same amount of loan from SBI has interest rate 8.45 not sure why.
Is bank charging high rate from me or its system error?
Please suggest what step i should take.
3 Answers
Hi,
Mostly, your home loan rate has a 1 year re-set clause (June-July), hence the interest rate has been reset as per the prevailing interest rates by your bank.
You may kindly check with your friends about their reset clause and its due date.
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I really don't think that this is a system error, Ashish. As Sreekanth earlier stated, this probably has something to do with the reset clause. SBI generally has relatively low-interest rates which is why I feel that getting home loans from them is quite cost-effective.
Please read my comments above about ‘low interest rates from SBI’
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Well when you changed to MCLR regime in 2017 they would have set the spread at 0.65% because at that time MCLR was 8% and spread was 0.65%.
Now when the reset happened, MCLR increased to 8.25% and with your spread its 8.9%.
I am pretty sure your friend has a spread of 0.20% which is why he has 8.45% now.
This was a very cunning trick played by SBI just after demonetization when they had to bring down the MCLR due to flush deposits. But to bump up the final rates, they set 0.65% as spread for new loans. All those who moved to MCLR at that time were always going to suffer due to high spread when rates increase which is exactly what is happening now.
Thank you for sharing your views!