Have you lost money because you were not thinking straight?
I have. More than once. Here’s one such experience.
I was in too much of a hurry.
So far, I had been blaming it on the urgency of the situation, and that my mind then was too preoccupied with the execution (more on that in a minute) – which allowed it to slip under the radar.
That’s just an excuse. The truth is I was naive. No, wait! Make that stupid.
20 years ago, I foreclosed a home loan in the process of selling my first home to buy a second. I chose the same bank (a leading private sector bank) to secure the 2nd loan.
Believe-it-or-not, the bank penalised me for foreclosing though I was borrowing more than double the loan amount from the same bank for my 2nd loan.
It all happened in a very short time, as I had to act swiftly to secure my new home.
The Story Behind This Story
I had invested in my first home which was under construction at that time. When you are in your mid-twenties, you get all excited about owning this asset that you get to call home.
It was a 1500 square feet apartment in Gurgaon. I was living on rent in Delhi then. My parents were visiting me for a week.
I took them very proudly to show my home. The drive lasted 50 minutes.
I was convinced my parents would be delighted to see it and equally proud of me as I was of myself.
Nah! The script played a little differently.
The house tour ended in a couple of minutes, and my mother was ready to share her verdict.
“Sell this and buy in Delhi,” she commanded. It wasn’t an opinion. She meant business.
I turned to Dad. He concurred.
I worked in Delhi then. My work required me to report to the office in shifts – from early morning to late night. The thought of me driving 15 miles up and down from work at odd hours had irked my parents. They could not come to terms with the fact that I would need to do this daily, and that too, for a modest home.
“If the house were special, I’d have still been okay,” said my mom. “If you have to live in such an apartment, you might as well live close to your work.”
She had decided. It did not matter what I thought.
On the way back, I explained to her that buying a similar-sized home close to work would cost me double, at the minimum.
“So be it,” she declared.
Once I figured I couldn’t change their mind, I quickly decided to find a new home before my parents left Delhi – in less than a week. They had to see and approve so that we didn’t end up in the same place later.
The search began the same day.
In four days (close to my office), we found an 1100 sq. ft. apartment in a 15-year-old building. There was no elevator; it required climbing the staircase so steep that the 2nd-floor residence felt like the fourth.
The apartment was bare, devoid of furnishing, that allowed us to sample the sunlight flowing into it. The brightness felt good. The decision was made.
It would have been great if the building had a lift. But that would have made it costlier and out of my budget.
The property agent introduced me to the owner, who lived in the same colony. He gave me 45 days to execute the deal.
My parents wished me luck before leaving Delhi. God knows I needed tons of it. I first had to sell before I could think of buying. And I needed a fresh loan more than double my existing one.
It all happened quickly. I found a buyer for my Gurgaon home. He was almost the same age as me, but far less anxious. Unlike me, he did not have to execute two deals – sell before buying. And two, he was confident about the home loan coming through in the required timeframe.
We were both borrowing from the same bank. I was hyper-anxious, and he was remarkably cool. I asked him to confirm with the bank if the draft would come through in a week. He called the bank to check (in my presence), and the lady who answered confirmed it would happen.
I doubted it. I had started the process earlier and was still struggling to make it happen on time.
Reluctantly, he shared the name of the lady he spoke to – his close relative – to convince me it would happen. She was the most famous lady banker of that time (no prizes for guessing!).
I was relieved.
Back Story Over; Here’s the Point
A few weeks after the bank loan was secured, I discussed the penalty I was made to pay with an official from the same bank whom I met for the first time. He said it could have been waived off had I raised it with the bank while closing the loan. It would have needed internal approvals, but there’s a chance it may have happened.
Yes, it was foolish of me not to do so then. My entire focus was to sell quickly so that I could buy within the date specified in the agreement to sell.
But shouldn’t the bank have acted on its own and excused the penalty?
I can understand being penalised if I was foreclosing the loan to secure a loan from another bank. But I was demonstrating my loyalty to the bank by taking a loan that was more than double the previous one. How is this fair? Some may argue it equals cheating your customer. Agree?
As a consumer, you have a right to protect your interests. When you come across any unfair practice, you need to raise your voice till you get justice. Often, we let it go, don’t try hard, or give up too soon.
If you don’t play full out when you face an unfair practice, who will?
At that time, in a single-minded pursuit to execute two deals within a specified duration, I ignored it. I shouldn’t have. My bad.
You should not make the same mistake. Do not act in haste. And if you do, fight for your rights.
