V would like to prepay 6L for the loan 14L so far emi paid for 11 months. what abt penalty charges is it gud to prepay now? whether the bank allow to close the loan amt as soon as posibble ?(20 yrs tenure of emi 18176)
as per bank schedule charges: Prepayment amount in a particular year upto 25% of outstanding loan amount: NIL
b. For amount in excess of 25% of outstanding loan amount in every financial year:
i. Upto 3 years from the date of first disbursal: 4% of excess amount prepaid
ii. After 3 years from the date of first disbursal: 2% of excess amount prepaid
I think ,it is better to pay the 75% of the loan amount and divid the balance amount into Number of years left of,this way you need not to pay the penalty and you can save the interest too.
Re: Loan prepayment
by Rajiv Deshmukh on Nov 02, 2009 11:55 AM
Not able to understand. One email says that we can not pay more than 25% of outstanding amount but your mail says 75%. How is it possible.
i strongly feel that you should not go for loan prepayment at this period,since the markets are not so good.You might be removing this "closure money"from some deposits or mutual funds and removal at this stage is unwelcome.Let the funds remain invested for a still more period.Secondly,i strongly feel that you would have got a home loan interest,very less than the prevailing rate and which you would not get that rate,if you opt for a second loan.By the way,the prepayment closure would be aorund 2.5% on the prevailing compounded interest and maximum ,it would be around 5% and not as mentioned.Also,there might be some clause,which says the penalty would be x%,if the loan is closed within xx months from the date of disbursa.Check it out,and in case,it is there,wait till the end of the period .
This is not the first instance where ICICI bank is acting in a very rediculous manner. The main reason for the problems in the new banks are because of computerisation. The staff are not aware of what they are for in the Bank. Again this is due to the very poor recruitment policy. The evil of aptitude test. The candidates just tick and pass the tests by sheer luck. They come and sit and they are highly paid for nothing. Not single query will be solved. ALL USELESS PEOPLE SIT WITHOUT knowing what is BANKING. I have seen people who have been working in mobile providers like Hutch, airtel and people who have worked in places like NIIT and automobile dealers of having the marketing background in the ICICI bank having ZERO knowledge about practical Banking. We have approached such Hitech banks when there were no anywhere banking and ATMs of the traditional Banks Now after all the nationalised Banks having such facilities Banks like ICICI will have there natural death.
Those who are seeking loan prepayment, ask for EMI change. In that repay maximum amount. If your loan is 5 Lakhs and if the outstanding is 3 lakhs, you could repay 2,85,000. For the remaining 15,000 issue new checks. This does not attract penalty.
With repayments, try to repay as early as possible. If you are already several years in EMIs, then most likely that most of the interest has been recovered by the bank. Repayment won't serve any other purpose than getting peace of mind.
Yes you can do so but not in the correct way.if you have paid 50% of the loan amount just bounce 4 payments... you will get a letter from the BANK. Negotiate you will get a relief for 25% of the existing loan amount.
SIrs, One of my friends availed a personal loan and when he tried to prepay foreclosure charges and other charges were asked for. Litigation is pending as ICICI is not offering any reply.
yup i agree with u guys, even i paid extra money when i pre closed my two wheeler loan., when ever they charging annual intrest, it is foolish ness when we try to preclose our loans, and it is good initiate. regards srikanth
