HDFC hikes prepayment charge for switching TO NEW LENDER

HDFC has started charging borrowers up to three per cent ( EARLIER 2%) of the outstanding loan if they decide to prepay their loans by borrowing from another lender. Loan switching means a borrower can reduce his loan costs by switching to a bank with a lower rate of interest.  Most lenders charge a penalty of up to two per cent of the outstanding loan amount for switching a loan The new lender normally charges a processing fee of about 0.5 to one per cent of the loan amount to take over the loan.

Plain truth is that HDFC wanted to discourage it’s customers from switching to more efficient low cost banks. These measures further decrease the market share of HDFC. The lenders  should not be allowed to discriminate between new and old customers. One day it will happen. That day HDFC have no other option but to treat it’s existing customers fairly. InvestChips predicts the share price of HDFC would come below Rs.500 within a year. Happy Retirement Mr. Deepak.

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