Teaser loans are not offered by all the banks

By | August 18, 2011

A recent press report said that dual rate home loans are once again capturing a space in the loan portfolio of some of the big lenders in the country. Lenders like ICICI Bank and HDFC as well as LIC housing finance have already introduced these fixed cum floating rate schemes in the home loan segment for customers.

Reports said that with the RBI’s direction for banks to set higher provisioning requirements in case of teaser loans, many other lenders are still doubtful in following the trend and opting for teaser loan schemes of their own.

Mr. Anil Kothuri, Executive Vice President of Edelweiss Housing Finance (EHFL) has said that it is unlikely that other financial institutions will come up with dual housing loan rates due to the provisioning requirement for dual rate loans that is put forwarded by the RBI.

Reports said that State Bank of India had closed down its teaser loan offer on grounds of higher provisioning requirements only. Lenders like Canara Bank have declined any plans to come up with such schemes. Ms. Archana Bhargava, Executive Director of the bank said that the bank has no such plans as the provisioning requirements for such loans are higher.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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