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My friend got fooled while taking a home loan of ₹45 lac.
After a lot of research, my friend took home loan from a top bank. He was sanctioned a loan of ₹45 lac. And with the loan, comes the infamous 'paperwork' - he had to sign 100s of documents stated as formalities.
After a lot of research, my friend took home loan from a top bank. He was sanctioned a loan of ₹45 lac. And with the loan, comes the infamous 'paperwork' - he had to sign 100s of documents stated as formalities.
However, when the first disbursement was made, he came to know that the total sanctioned amount is ₹49.25 lac, and not ₹45 lac.
When he inquired, he was told that the balance ₹4.25 lac is the amount of insurance that the bank has paid to the Max New York company
When he inquired, he was told that the balance ₹4.25 lac is the amount of insurance that the bank has paid to the Max New York company
Bank officials had sold him a home loan insurance without his notice and issued him loan of extra ₹4.25 lac along with the Insurance company.
While this information might have been buried under the loads of documents, he was never told about this by the officials explicitly
While this information might have been buried under the loads of documents, he was never told about this by the officials explicitly
Bank gets a hefty commission from insurance agencies, and the cost of insurance is often much higher than the prevailing market rates.
A normal term plan with ₹50 lac cover with 25 yrs tenure will cost nearly ₹1 lac, while this costed him ₹4.25 lac.
A normal term plan with ₹50 lac cover with 25 yrs tenure will cost nearly ₹1 lac, while this costed him ₹4.25 lac.
Although it is essential to buy an insurance cover while taking a loan, you are under no obligation to do so, not from any bank nor any NBFC. Purchasing an insurance plan is the sole discretion of the buyer and borrowers cannot be forced to purchase such plans.
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