Thursday, April 21, 2011

End of teaser loan era

Finally SBI, under pressure from RBI, has ended the teaser loan campaign.
This is a big blow for existing customers (irrespective of the their lender) who are having loans very high high interest rates.

Teaser loans with lower interest rates for first 3 years were taking care of the switching cost (generally 2% of the outstanding principal) of the existing home loan. It has now gone. It is very easy to guess that private players might be behind the so called "pressure" from RBI.

It's funny that RBI is more concerned about teaser loans than the plight of such existing customers, and surprisingly, in the pretext of "concern" for existing customers. 

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