Virtual view: HDFC Bank home loans and much more
Despite Indian economy being in the doldrums, home loan market have been red-hot in recent times
. Credit goes to State Bank of India, country's largest lender, who started it all precisely an year ago when they announced an innovative housing loan scheme, being offered to people at a meager 8 percent interest rate thus setting the ball rolling. Applauded for their daredevilry, the innovative step did manage to grab many eyeballs besides, creating ripples in stagnant loan market. SBI's daring initiative didn't go down well with loan industry, but the need of something-to-be-done quickly prompted other banking players to come up with schemes on the similar lines of their own. It was then when HDFC Bank home loans became the next most-wanted commodity in the loan market. The bank launched a one-of-its-kind dual rate loan product that was pitted against SBI initiative. The scheme attracted prospective loan applicants on two basis, firstly, the interest rate and secondly, the dual-rate feature. The former part was eye-catcher right from the onset, but it was latter that really kicked off a new trend in the home loan market. It invited loan borrowers to enjoy double benefit of both fixed and floating interest rate system. Under the scheme, home loan aspirant will be charged at a fixed rate until March, 2012 and thereafter the interest mode will automatically shift to floating version. Meanwhile, SBI drew flak from all quarters from industry and specially HDFC Bank which stated that such business stunts might do wonders to bank in short run, but in long run, there always exists a risk of defaults and bad debts which can hurt any lending institution. On the other hand, the new HDFC Bank home loans scheme was launched in market after the organisation was assured from liquidity side. The organisation, apparently, also tightened their parameters to assess a loan applicant's eligibility for availing the loan. This didn't come as a surprise as the bank had already taken possible long term cons in account at the first place. Another factor that backed this calculated risk was operational efficiency and high-quality portfolio along with a sound track record. Meanwhile, it is important for prospective loan borrowers to know that there is more to the scheme. Yes, loan applicants will be charged with fixed interest rate whatever their amount be. However, later when floating interest rate will come into picture, things will vary. Moreover, NRIs (Non Resident Indians) and PIOs too can take advantage of this scheme. Interestingly, this is being identified as one gimmick that has resulted from consistent favourable performance even in times when the entire economy including the banking sector (of course) was not at its prime. Summing it up, what this tug of war between private and public sector banking players has done that customers who from past some time were thinking of buying a shelter or a plot of their own, can now realise their dreams. What more even the real estate sector, which too from past some time hasn't hit the purple patch, can look forward to bouncing back courtesy, cheap home loans like the ones mentioned above.
Virtual view: HDFC Bank home loans and much more
By: Sanjit
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