‘Teaser Loans’ are now a history
As I have written in my previous post: Beware of “teaser” home loans, I have mentioned that advisers are warning individuals against obtaining a “teaser loan” only because of the lower interest rate, as it could have serious impact on their finances if the interest rates were to shoot up when the floating rate kicks in after the initial years.
Although all prominent banks have introduced teaser home loan rates as they are flush with money due to lack of demand from companies for funds, the Reserve Bank of India (RBI) has taken a stern stand on this “bad practice” and have categorically asked all the participating banks to END TEASER LOANS. As reported by Economic Times, RBI is concerned mainly because borrowers may subsequently find it tough to repay the loans, once interest rates go up after the first couple of months (during which the rates are fixed at a fixed rate). I hope banks are ensuring that borrowers are well aware of the implications of such rates and the appraisal takes into account repaying capacity of the borrowers when the rates become normal. [Refer: RBI sees red over teaser home loan rates]
As per RBI’s directions, SBI will be terminating its teaser loans offers by March End, and HDFC will continue till end of February. However, ICICI Bank has immediately withdrawn all its teaser loan schemes. [Ref: Economic Times]
Tags: Deals & Offers, Gyaan, Home loan, Housing, Latest trends, Opinion, Tips
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March 17th, 2010 at 3:44 am
When the bubble was inflating, some big bosses made big money. You would only expect that the bubble would eventually explode in some other people’s hands. A bubble is a gamble. Some win, some lose. I did not ride that bubble not because I don’t like good yields on my investments but because I knew it was a bubble, and it was a gamble. Now, some people made their bets, and they lost. Now what I don’t understand is why do I have to pay for the losses of the ones who decided to ride this bubble only because they were not satisfied with the moderate yields that I was earning. Tell me why. Anyone? If they are looking for a resource to fund the losses of the losers of this bubble, then they should go ask the winners of the same gamble. They are the ones who made big and I mean big money during the bubble.But then I am being ridiculous to expect that the big bosses would be made to pay for the loss. After all this whole crisis thing was cooked up so that they can plunder our cash.
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