HDFC cheating its customers by not passing the benefit of low interest rates

Today inflation touched the historic low of 0.44%. This was in line with the expectation considering the high inflation period we saw in the previous year. Home Loan companies were smart enough to increase the rate with every move of RBI but the scenario is different when it comes to reduction of rates by RBI. HDFC which is king of home loan market has been among the slowest one to reduce the rate. Till now it has been riding on its reputation but in recent days it has more been exposed?

Many existing customers was recently told that pre-payment penalty is 3% but when it faced a lot of criticism in media it quickly changed its policy and made it mandatory for new customers. Many customers have not yet received reply on its queries related to shift of their home loan. The mail remains unanswered and it seems no one in HDFC is willing to talk.

HDFC till date was using its market leadership position to acquire the customer. Its rate was stable but the main fact is that the existing customers are suffering both in terms of customer service and their greed. While whole of markets has reduced rate, including LIC housing Finance by 75 bps, HDFC has literally kept quiet in this matter. People in HDFC are paying different rates and it is not consistent at all. The rates are way above 11% to 12% and repeated queries by customers are ignored.

This can be a safe strategy by HDFC wherein they have parked their money in safe but less interest yielding investments and are covering up the lost part through their customers. If this is the case then why the customer has to suffer. They should better know how to manage money.

In comparison my loan from AXIS bank is doing pretty good. They respond to my queries quickly. They reduce the rate in line with new customers i.e. they have only one rate both for new and old customers. The most important thing is that they don’t have any pre-payment penalty even if you transfer loan to other bank.