| Address: Mumbai City, Maharashtra |
In November 2016, I took a home loan from HDFC-Trade Centre, BKC, Mumbai.(acct no[protected] At the time of taking home loan, I was explained two options for interest rate i.e. Fixed rate and Floating rate.In Fixed rate, interest rate was to remain same irrespective of prevailing market rate while in Floating rate, interest rate will be the prevailing interest rate (which is applicable to new customers).
At the time of disbursement of loan we were asked to sign agreement, wherein interest rate was linked to Retail Prime Landing Rate(RPLR) .On asking, it was explained that this is the rate which HDFC charges for purchase of various consumer goods.For Home Loan, rate is lower by 7.15%, which is known as Spread.We were assured that interest rate chargeable to us will be the one applicable to new customers.
After one or two months, rate came down to 9% from 9.15%, benefit of lower rate was extended to me. After few months interest rate came down to 8.5%.I assumed benefit would have been extended.However after few months, I realized that I continue to be charged 9% (and not the prevailing rate of 8.5%).On checking up with HDFC, I was told that Spread has increased to 7.65% and RPLR continues to be same and hence i have to pay 9% as against 8.5% applicable to new customers and if I want benefit of higher Spread, i should pay Conversion Fee.As the differential interest was more than Rs 1000/per month and HDFC had already collected for many months., I paid the Conversion Fee of Rs 500/.
After a month or so, Home Loan rate has come down to 8.35%.Benefit of this lower rate is not being extended as HDFC instead of lowering RPLR has increased the Spread to 7.80%. I am required to again pay Conversion Fee and that also Rs 2850 as against Rs 500/ paid last time. Rs2850/works out to differential interest for 7-8 months.If HDFC decides to increase the spread during this period, I will be required to pay Conversion Fee again and perhaps still higher amount.In effect, will be
Above is pure cheating by HDFC. Floating rate is not the one which is prevalent rate of HDFC but a higher rate decided unilaterally by HDFC.
RPRL is defined in Article1 of the agreement.However term Spread is not defined in the agreement(though used in Article 2.13).Agreement does not spell out method of computation.During discussion at the time of signing, i was told that floating rate will always be the prevailing rate.However in reality, floating rate has nothing to do with prevailing rate and every few months I have to pay additional amount in the name of Conversion Fee.
I took up the matter with HDFC without any fruitful result.
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