HDFC Ltd Home Loan Experience – A Learning for Borrowers

Today i will share my worst experience till date i.e. availing Home Loan from HDFC Ltd. As i mentioned in my previous post that HDFC Ltd. and HDFC Bank are 2 different listed entities. Many potential borrowers fall into this trap considering both are same. After Pre Home Loan Review i finalized HDFC Ltd based on good experience with HDFC Bank. After processing fee was en-cashed, i came to know that both are different. It was too late. HDFC Ltd is largest and oldest lender. My personal philosophy is to always go with Market Leader and you will not face any problem. Unfortunately, this time, i was wrong.

I took the loan from Marathalli Branch in Bangalore. On a fateful day, i visited the branch first met a gentlemen Mr Niranjan who is branch head. He passed me the no. of DSA (Direct Selling Agent) Mr. Vinod & told me to coordinate with him. I called Vinod and he seems to be a very nice person. He was very sweet during first interaction and promised me that he will help end to end in this process. I just need to sit back and relax.

Besides helping in Home Loan Process, DSA’s also help in other activities like notarization, e-stamping etc. The biggest advantage is that you need not go anywhere. My first advice is to select your DSA very carefully and through reference only. Like Husbands/Wives they can also make your life Heaven or Hell :). For a home loan application, I told Vinod that i will be late from office. He told me that for him the customer is GOD. He can come at midnight for business. I fell flat with his customer friendly approach and thought i have landed in right hands.

The same day he came at 10 PM in the night and since i already had a list of documents required for loan processing, i handed over the complete set to him. During the informal conversation, he told me some health problems his family is facing (Which i realized later that it was cooked up to gain sympathy). While leaving, he told that he will let me know in 2-3 days on my exact loan eligibility and loan status. Just to add i was applying for pre-approved Home Loan.

To my utter surprise, next day i received a call from him and he told that all the docs are in place for loan processing. As a next step, i need to submit the processing fee (PF) that was approx 11k plus. He told that he will come in the evening & will collect the cheque. I requested him to waive it off as i heard that usually HDFC waive off processing fees. He told me that now it is not possible but still he will check with his senior and confirm to me.

Same day evening i received call from him and he told that he tried to convince his boss. The scheme to waive off processing fees is over. I said OK you can come and collect the cheque same day late evening. He also assured that if i will share a single case of PF waiver then he will refund the same from his pocket to me. He also promised i will get sanction letter in a max 2-3 days time. I gave him PF cheque same day evening and that was en-cashed next day.

This was the beginning of my troubles. Just after cheques encashment, DSA stopped taking my calls. I used to call him numerous times, dropped so many SMS but he never used to call back and respond back. Whenever i tried from my other mob no or landline, he used to pick up call and apologize for not picking up the call from my mobile no. with him. After that, he stopped picking up call from my other no’s also, i found out innovative ways to reach him like a call from PCO, friends mobile etc.

Anyways after so many follow ups i received my sanction letter that took approx 10 days time. I was negotiating a property deal and about to finalize the same. It was basically a transfer case (pre-registration) and there were some queries from Builder and Seller. I called DSA so many time times in 2 days but he never  picked up a call. Eventually, i lost the deal as no one waits for too long.

Before proceeding further just to add that call centre of HDFC is good for nothing. They are just pre-recorded human beings who will tell you to call your respective branch. The problem with the branch is that no one picks up call. Once i visited Marathalli branch and complained this to Mr Niranjan. He told me it is not the case. I gave him LIVE DEMO and called branch no. in front of him, only that landed at the reception. The telephone was on mute and receptionist was busy in some other work. The branch manager was speechless :).

Anyways coming back to the main topic. At last, i managed to finalize property and after too much struggle with DSA, i put everything in place (90% efforts were mine only). I visited branch multiple times and i finalized the date for registration. I informed and took confirmation from HDFC before confirming registration date to the seller. The seller was flying down from Delhi. I kept asking HDFC on the status of cheques and they kept assuring me that cheques will be ready on D-day. DSA keep on telling me that have faith in GOD. I wondered cheques will be issued by the HDFC if they only don’t know the status then how GOD will help. Finally, the D-day came and Seller flew from Delhi and to my utmost shock, i was informed cheques are not ready. It was the last thing that i expected from HDFC. But i knew that i have to bear the brunt of taking the wrong decision. I reimbursed airfare and hotel stay to the seller.

My cheques were issued after 3 days and i took xerox to be doubly sure that they are available to the branch. A day before registration, Marathalli branch shared a mobile no of a lawyer and informed me that he & HDFC executive will accompany us for the registration. I called a lawyer and he promised to meet me at 10 AM in Marathalli branch.

On the day of registration, i along with seller reached Marathalli Branch at 9:45 AM and the branch opened at 10:15 AM. The more surprises were waiting for me. I was told that neither lawyer nor HDFC executive is coming for the registration. Before registration, i was supposed to go to Sellers Home Loan Bank (15 Km from Marathalli) and then had to reach registrar office for registration before 3 PM as suggested by my lawyer. I was feeling jittery. Finally, branch manager Mr. Niranjan told me that he has called my DSA and he will accompany us. He reached at 11:30 and we rushed to complete everything on time. We managed to complete all the formalities just in time. Thanks to my luck and Bangalore traffic.

During the process, i had submitted 15 original docs to HDFC Ltd. I requested HDFC to issue an acknowledgement regarding the same else i didn’t have any proof regarding the same. They were hesitant to issue the same and gave some excuse or another for the same. I escalated to info.bangalore@hdfc.com and then to Mr Sujit (Operation Head) but no one reverted. When i escalated to Mr. Nagendra (Regional Head), i received a call from the marathalli branch and they agreed to issue the acknowledgment letter. I felt as if i have climbed Mount Everest.

Recently, i also came to know that they have increased Spread to 5.75% for new borrowers for 30 Lac to 75 lac band. When i called them to increase my spread the executive told me to deposit approx 20k for the same. It is a gross violation of directives of National Housing Bank that has directed all HFC’s to charge uniform rate to both old and new customer.

I regret my first bad decision of life and this post is just to make others cautious in their approach while dealing with HDFC

Key Learning’s based on my Experience with HDFC Ltd

1. HDFC has a different standard for different customers. It is very unfair though they claim to be fair with all. For few borrowers, they waive off Processing fees but charge wherever they can.

2. They have different interest rates for Old and New customer depending on spread of the borrower. It is a gross violation of directives issued by National Housing Bank (Pls click on the following URL for  same) (Update: NHB has quietly withdrawn this circular on Aug 22, 2014)

http://www.nhb.org.in/Regulation/pol%20cir-44.pdf

3. Please insist on the acknowledgment of original docs submitted by you with HDFC on their letterhead. They are very reluctant to share the same. I had to escalate to Regional Head to get the same else they keep giving excuses

4. Before finalizing the date of registration, kindly insist on xerox of the cheques in the name of seller

5. Select your DSA through reference only. It is as imp as selecting right life partner

6. HDFC don’t reply to email queries (i sent it on info.bangalore@hdfc.com and never received any revert)

7. Contact us section on www.hdfc.com is not working from last 6 months or so. I myself was trying the same on regular basis

8. Call Centre does not know anything about your loan account. They will only refer you to the home branch

9. No one picks up calls in the branch

10. You should carry Banker’s cheque towards stamp duty and registration charges. This exercise is independent of the home loan process.

11. Last but not the least, there is no grievance redressal mechanism in HDFC Ltd.

Recently i visited HDFC for part pre-payment of my Home Loan, They told me to fill Prepayment Request Letter. Basically, this form captures complete information about your source of fund (Source of funds utilized for Pre-Payment of Home Loan). The HDFC executive also asked for last 6 months statement of Bank Account.

I failed to understand the logic behind this move i.e. last 6 months statement. I am issuing a cheque from the account, that is debited every month to clear EMI. The account is in my name. Lastly, there is no penalty on pre-payment irrespective of the source of funds then Why should i provide my last 6 months account statement to HDFC? I protested and refused to provide the statement then HDFC executive accepted my pre-payment without 6 months statement.

HDFC executive was not able to explain the purpose or reasoning behind the bank account statement. HDFC should not be concerned about the source of funds and should only interfere to the extent of recovering the amount due irrespective of its source. Hope someone will provide the logic behind this move on this forum :).

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