A Cautionary Tale: SBI vs. LIC Housing Finance in Home Loans

Choosing a home loan is a crucial financial decision, and it is essential to carefully evaluate every option available. While public sector brands like SBI have earned a great deal of trust, my recent experiences with LIC Housing Finance, LICHFL, have raised significant concerns.

Choosing Between SBI and LIC Housing Finance

My father, influenced by the trust associated with public sector brands, opted for an LICHFL home loan. However, after 15 months of timely payments from our end, we encountered significant issues that have had a severe impact on our situation.

Software Glitches and Customer Service Woes

Internal software updates in March 2023 caused disruptions in our auto-debit EMIs, leading to missed deductions and the need for manual interventions. Despite contacting the local office, a senior associate displayed limited knowledge, failing to explain discrepancies and demonstrating a concerning lack of understanding of basic financial concepts. Escalations to branch managers and regional heads proved futile, resulting in months of unresolved issues.

Negative Impact on Credit Score

A system error in October 2023 caused an unauthorized auto-debit, even after manual payment, resulting in a bounced EMI and a significant drop in the CIBIL score, exceeding 80 points. LICHFL officials showed no concern for the detrimental impact on my father's creditworthiness.

Resolution Through National Housing Bank

Only after contacting the National Housing Bank in January 2024 was the EMI issue finally resolved. However, the negative impact on my father's CIBIL score remains unaddressed, potentially hindering future financial opportunities.

Lessons Learned

This experience highlights the importance of considering factors beyond brand reputation when choosing a home loan provider. Thorough research is crucial. It is recommended to compare offerings from various lenders, including SBI, a leading public sector bank known for its extensive reach and customer base. Online reviews and assessments of factors like customer service efficiency and transparency should be considered to make an informed decision.

The best home loan provider is the one that offers competitive rates, transparent processes, and reliable customer service. It is important not to let brand loyalty cloud your judgment when making such a significant financial decision.