HDFC customers will now find it expensive to switch over to another bank in the wake of the decision taken by the bank to charge borrowers up to 3 percent of the outstanding loan for prepayment. Until now, borrowers need to pay 2 percent of the outstanding loan if they want to prepay the entire loan amount within three years of disbursement.
The move has an implicit objective of discouraging the existing borrowers of HDFC from switching over to State Bank of India, which is now offering home loans at 8 percent for the first year, industry professionals believe. The new loan scheme by SBI has stirred the market with people flocking the bank for more enquiries. This has made HDFC concerned about losing its existing customer base to SBI. | 
