Thread by @indrajayanthan

@theBuoyantMan These are few harsh realities
1.The moment you took a loan, a lumpsum of interest+ principal is calculated and whatever emi we pay is reduced from total (technically only interest) so that prepayment doesnt affect banks. for eg
principal=100 and interest =100 for 10 years with

@theBuoyantMan 20 per year emi. if you repay 100 rupees in first year, we think bank reduces from principal too. but no they calculate as 200-100=100 still pending from customer. in short never prepay loan !

2. never pay emi on last date. pay 1 week prior. even if you pay emi and due to some

@theBuoyantMan banking error (server down to dumb staff) the transaction is not processed, bank will consider as you have delayed and issue penalty to you. If its staff error they will hide it and let penalty accumulate. You will realize it only when you think full repayment has done and still

@theBuoyantMan bank says penalty money is pending and they wont close loan account unless you have paid it. my uncle paid 25000 extra . you can shout, argue, complain to ombudsman etc but like my uncle if you are planning to take loan again from same bank we cant do much.

@theBuoyantMan 3. never ever believe what the salesman or even bank manager says orally.
4. never sign loan documents immediately. take it to home, read it for atleast 1 week.
5.The bank recollects first emi at the time of giving loan itself. not legal but yes thats common practise. few

@theBuoyantMan collect 3 emi too. few salesmen says our bank doesnt do that but conveniently insert an application for personal loan for the first 3 emi along with loan documents which customer never knows. we recieve full loan amount, agents gets commission and bank issued two loans. as per

@theBuoyantMan per documents (which we never read) we had applied for a personal loan. Its your fault !
6. some banks staff collects extra money as processing fees, blank checks as gaurantee etc . reading the documents carefully will help you to identify the correct processing fees. in case

@theBuoyantMan 7. you have a doubt, email the query to bank manager( its a proof) but mostly they wont reply. You can complain to ombudsman (email with cc to respect manager) will help answering queries.
8. you may be having phd in english but still wont be able to make sense of half the terms

@theBuoyantMan and conditions ( including banking employees) seek professional help ( not loan agents but legal experts ! ) especially for business loans. The valuation of a business varies from manager to manager and while approving loan, some new manager will approve only half the loan

@theBuoyantMan amount or slightly increase interest rate by 0.5 % etc (small increment that we cant say no especially after undergoing all the headaches for loan processing but its a significant money in long term ). they cooly say its already mentioned in terms . take it or leave it.

@theBuoyantMan 9.political support ( easiest is your ward councilor / member) will do wonders especially for student loan !

@theBuoyantMan 10. bank will call you if it benefits them. never expect bank will call you to pass any benefits you are eligible. Always read through newspapers and incase of any query you can email , remainder email etc to bank manager ( again proof) , elevate to bank ombudsman with cc to bm.