Sandesh Goel

Floating rate home loan (at least in india, since that's where my experience lies) is a grossly misused concept. I have taken 4 different home loans in the last 5 years, and have learnt a few useful lessons. All banks have a benchmark lending rate (BLR), this has slightly different names in different banks, but the concept is the same. When you apply for a floating rate home loan, they give you a discount over the BLR, and will try to woo you by giving the lowest possible effective rate (BLR - discount) in the market. But, this is just a ploy to lock you in and exploit you for the rest of the loan tenure. The BLR is a complete sham and the banks have complete independence in how to manipulate it. You will realize this when the interest rates in the market start to fall below the level that you got your initial loan at. The reasonable expectation is that your effective rate should fall as well (after all that's what you thought "floating" meant). But, lo and behold, no...

Watch out for the so called wealth management services offered by the banks. Your relationship manager from the bank will offer to do this for you. I often wonder how qualified these guys really are, they do seem to be smart guys and girls with MBA degrees, so I would assume they do understand what wealth management means. I have obliged plenty of these wealth managers during my last 3 years of experience in dealing with banks and researching information about investments in general. But, not one of them has come close to helping me "manage" my "wealth". All that they are interested in is peddling schemes and offers that result in big fat commissions for them. And they don't hesitate in brazenly lying about the "features" of the scheme that they are selling. These are your white-collar crooks. I am amazed at how they twist facts with a straight face. Here's one example that I have overheard plenty of times. A new fund offer (NFO) from a mutual ...