transferring homeloan from HDFC to Citibank

[dev13]

I am planning to shift my homeloan from HDFC to Citibank.

The loan is taken from HDFC last year (exactly a year ago) for BDA site purchase and construction (ongoing)
Main motive for me to shift from HDFC is that their Rate of interest for my loan is 0.75% higher than what Citibank is offering.
and Citibank also has HomeCredit (similar to SBI's MaxGain) that works like current account.

I understood from NHB (national Housing Bank) site, HDFC annot charge prepayment penalty as it is s floating rate loan.
Would there be issues from HDFC to release original documents etc?

Any precautions I need to take before I move with paper work?

Any suggestions from experienced members are welcome.

[msn1270]

FYI

Pre-Payment penalty charges are still in practice with various banks & NHB's for plot loans. Waived off only for Home loans.

Double confirm this before change over.

[mramki_77]

Also do not forget about preprocessing charges for loan from citibank.

Thanks
Ram

[dev13]

thanks for all replies. finally decided to go with Stanchart Homesaver.
Citibank is too slow to respond in my case.

[kmkklk]

I had HomeSaver from SCB. As per my agreement, there were no pre-closure charges if I close the account after 5 years. When I went for closing the HomeSaver account after 6 years, SCB told me that they have changed the T&C and I have to pay pre-closure charges of 2% or so. When I showed my agreement papers, they said that as per the latest T&C, I need to pay pre-closure charges. Finally, I told them that from now on-wards my lawyer will talk to SCB lawyer and I have asked SCB lawyer's contact details. After couple of days, they came back saying that as a special case, we will allow you to close the account without any charges...only condition was I need to close within 7 days of their confirmation to close...

So, please double check your agreement papers and ask them about the above scenario, i.e. changing T&C without your knowledge.

Also, now & then there will be small debits from your account. If you manage to observe them and find time to call them, they will reverse it. Otherwise, they will continue to do..this happened to my colleague(s) also !

[dev13]

Kmkklk, thanks for the note of caution.

I double checked with sales guy and will scrutinise agreement before signing for Pre-closure clauses.
I guess your case would have happened before RBI sent a circular to all banks that no pre-closure penalties on floating construction loans.
(so did NHB for all Housing Finance companies).

once factor I decided with Stanchart, is that Citibank does not follow Baserate+Margin, they instead call it baserate+HVLR+margin.
and I bargained for 10.71% floating rate for Homesaver (without taking any Insurance cover from SCB).

[msn1270]

dev13

Be sure to double confirm with actual Bank manager what your sales guy has offered you the benefits.
In most of the cases, these sales guys are from an external agency and they go to any extent to attract
the customer by giving false information to customers and get away with their commission.

This is a common problem with Home Loans, Credit Cards,....etc.