Is there any Penal Charge for Prepayment of Loan ?

Penal Charge for Prepayment of Loan  – Yes, most banks allow you to repay the loan ahead of schedule by making lump sum payments. However, banks may charge a pre-payment penalty which may differ from bank to bank.

Pre-payment penalty may vary according to the sources of funds used to pre-pay the loan – if you avail of a loan from another bank to pre-pay the loan, charges are usually higher than when you pay from your own sources.

The details of pre-payment and associated charges form part of the sanction letter / loan agreement entered into with the concerned bank.

Incidentally, banks have been instructed by the Reserve Bank of India not to levy pre-payment charges on home loans taken on floating interest rates.

Enter your email address:

Tags:

We will be happy to hear your thoughts

      Leave a reply

      AskBanking - Banking FAQs & Support Blog