HYDERABAD: To make up for the spiralling interest rates, banks -- both public sector and private -- are going all out to woo customers by offering attractive schemes which were unheard of in the past. While some banks are assisting prospective customers in choosing a property, others are clubbing customised insurance products with housing loans, giving incentives on processing fee and even waiving penalties on pre-closure of loans.For instance, State Bank of Hyderabad (SBH) periodically organises a two-day home loan mela in association with select developers in the city. “The idea is to bring developers and customers on a common platform. Typically, we take about 1-2 weeks to process a loan if the necessary documents are in place. Cross-checking the property value and determining the maximum loan is a time-consuming task. These melas allow us to avoid this process as we would have done the valuation even before conducting the mela. For an interested customer, a loan could be processed in the shortest time possible,” says a senior official of SBH.The bank is not alone. Several other banks such as SBI, HDFC and ICICI Bank too organise such melas from time to time. Besides, banks have come up with incentives such as waiver of pre-payment and foreclosure penalties. For instance, SBI does not charge a penalty if a customer is willing to pre-pay or foreclose an outstanding loan or while transfering an existing loan from SBI to another bank or vice versa. “Also, a processing fee is taken only for applications that are sanctioned a loan. Even this is a flat rate of Rs 10,000 for loans up to Rs 75 lakh. For higher loans, we charge 0.50 per cent of the total loan with a cap of Rs 10,000,” says Ajith Kumar, deputy general manager, personal banking unit, SBI.Interestingly, most banks offer a 50 per cent waiver on processing fee if customers apply online. On the other hand, banks such as Development Credit Bank (DCB) encourage savings by allowing customers to park their excess funds in the loan account. “ It will reduce the interest burden on the customers. At the same time this excess fund can be withdrawn whenever the customer wants,” says Abhijit Bose, head, retail assets, DCB.Besides, banks like DCB are offering term insurance and accident insurance cover to borrowers as part of the home loan package. DCB has tied up with two private insurance service providers and all the paper work for insurance products would be done as part of the home loan package.Bankers though reason that notwithstanding the hike in interest rates, there’s no reason for consumers to refrain from making a buying decision. “Customers need to consider property prices rather than interest rates because once the property is purchased, price change does not impact. And considering that housing loans range upwards of 15 years, there would be interest rate cycles, which a borrower will have to live through. Since most of the customers take floating rate loans, they will get an advantage when interest rates go down,” says Renu Sud Karnad, managing director, HDFC Ltd.
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