SBI offers lower rates to Old Home Loan Borrowers

State Bank of India's old home loan borrowers have a reason to rejoice. The bank has decided to allow these borrowers to switch over to the new floating rates that are lower, said a bank official.

Borrowers who have taken loans linked to SBAR (State Bank Advance Rate or the prime lending rate) are paying as much as 2-3 percentage points more than existing floating rates that are linked to the Base Rate.

This is because the Base Rate is lower than the SBAR. SBI's Base Rate is currently at 10 per cent, while the SBAR is 14.75 per cent. Besides, the bank has also reduced the spread it charges over the Base Rate for home loans. Because of this, new home loan rates have moved southwards, said the official.

There is no restriction on the tenure or the amount of the loan for customers to switch over. The bank is charging a fee of 1 per cent of the outstanding amount to switch to the new rate

The current floating rates are:

• 10.5 per cent for loans up to Rs 30 lakh, 
• 10.75 per cent for loans between Rs 30 and 75 lakh, and 
• 11 per cent for loans above Rs 75 lakh.

Those borrowers who took a home loan even a year ago are paying higher rates. In some cases, the difference is as high as 3 percentage points. So, in the interest of fair practices and transparency, we are offering the current floating rates to all our customers. On an average, the benefit to old customers could work out to be more than 1 percentage point.

For switching over, the only condition is that the customer should not be a defaulter. If so, then he or she can pay the default amount and switch.

Customers have been enquiring about shifting loans to other lenders given the higher rates, and this is one reason why SBI came up with such an offer, the official said. 

Bajaj Allianz charges heavily even after serving minimum period

Beware of any ULIP plans, especially from Bajaj Allianz. You will feel cheated when you will be in need of money, and want to get money from them.

While purchasing the policy their agents tell that you can withdraw the money after 3 years of premium. But the thing they don't tell is that you can't withdraw your own money even after that (minimum 20 years!). You should have been read your 60 pages documents to verify, and to catch their agents lies.

Lets take a scenario of Bajaj Allianz ULIP as follow:

• 15,000/- is the premium for a year
• 3 years is the Minimum number of years you have to pay
• 60,000/- you paid for 4 years (minimum period served)
• Say as per 9.0 pa interest (FD rates), you would have earned 22,000/- interest without any risk.
• Total Investment : 82000/-

Now let see what they got,

• -10,000 maintenance charges for 4 years
• -8,000 for surrender charges (they never tell you about that)
• -22,000 As market neither did good nor bad (only Bajaj Allianz got money, not you)
• YOUR TOTAL LOSS  = Bajaj Allianz Profit =  40,000/-

Lets say market doesn't change much (went up and down in 4 years). What you got:

• 60,000 you paid, and as per interest of 9 pa, this amount should have around 82,000 by now.
• They have taken 18,000 from you (off course they have to pay their employee salary from your pocket)
• You get 60,000 - 18,000 = 42,000/-

How much You Lost :

• 82000 - 42000 = 40,000/- (50% of your money)

I've invested and studied many ULIPs plan, and suggest you not to invest in any ( and never in Bajaj Allianz).

IFCI Tax saving bonds closing on November 14, 2011

Last few days are left before the Closure Date of the Series III Issue of Tax Saving Infrastructure Bonds of IFCI Limited that opened on September 21, 2011 (scheduled to close on November 14, 2011 - unless decided to pre-close). 

The Long Term Infrastructure Bonds carry tax benefits under Section 80 CCF of Income Tax Act, 1961 up-to an investment of Rs.20,000/- during the FY 2011-12. The four options available for investment and other key highlights of the Issue are as under :

Option I	Option II	Option III	Option IV
10 Years	10 Years	15 Years	15 Years
Cumulative	Annual	Cumulative	Annual
8.50% p.a.	8.50% p.a.	8.75% p.a.	8.75% p.a.
Buyback option at 5th and 7th year end		Buyback option at 7th, 10th and 12th  year end
1.   Bonds can be applied-for in physical or dematerialized form 2.   The face value and Issue price per bond is Rs. 5,000/- 3.   Bonds shall be listed on Bombay Stock Exchange (BSE) 4.   There is lock-in period of 5 years after which they can be traded/transferred 5.   Only Resident Indian Individuals (major) / HUF can apply.

For further details including downloading of the Application Form, Information Memorandum etc., you may visit the website www.ifciltd.com or click at http://www.ifciltd.com/IFCIBonds/InfrastructureBonds/CurrentIssue/tabid/225/Default.aspx

Should you require any further clarification, feel free to write at infrabonds@ifciltd.com.

Also read : http://timir126.blogspot.com/2010/10/idfc-long-term-infrastructure-bonds-ipo.html