Standard Chartered is enhancing my 11 Lakh - 15 year loan to 13.5% which I believe is very high, Can someone share how much other private banks are charging? I will be obliged.
When u take a loan, penalty in the name of processing fee. When u pay loan 1 day late, penalty in the name of late payment. When u pay early to close the loan penalty in the name of pre closer fee . What is this? He/she can not decide any thing even for his good. For every thing penalty? When we come out of these penalties !
Re: Penality for pre payment !
by harikishor on Feb 26, 2011 01:10 AM
only a court can put penalty on individual not a bank. Our R skal administration is supporting in squeezing common man. No rule says how bank can lavy penalty in adition to interest. Who cares what happen to money collected as penalty it may be syfonned to binladen
There is no concept of paying higher interest at the early years of a home loan. You always pay the interest on the bank rate based on your outstanding amount. So after 15 years, if you have 5lakh outstanding principal with 12% interest, you will still pay 60000Rs as interest. Where as if you close your loan at that time, you will pay only 10000Rs as preclosure charge (assuming 2%), and you can still save 50000Rs. So prepaying is always a better option if you have money with you (at any time of loan tenure). The earlier you can do it, you will save more of your hard earned money. I too had my homeloan with ICICI (was paying at 12.5%), which I moved to HDFC with 8.5% for 1st year and 9% for second year (loan will have interest rate based on HDFC lending rate from 3rd year onwards). I also made it a 5 year loan instead of 20years, since that is the best I can do at this moment. HDFC doesn't charge prepayment charges in the final 2 years of loan tenure, so in my case after 3 years I have the option to close my loan with out paying extra.
Re: Better to prepay the loan at any time
by Hoodibaba on Feb 17, 2011 04:08 PM
It depends on the borrower's risk appetite - If his job ensure steady income during the period of loan, flexibility is offered for dwelling in various investment avenues.
Basic Question, can the borrower say, no problems with steady income for next (say) 10 years?
Please do something to clean Indian Real Estate Sector.
There is lot of Black Money involvment in Real Estate Market. The lobby makes sure the prices etc. will not go down. Who will clean this sector? GOD?????????? Space for Park etc. are turned into "Only Affluent People Clubs, Hi-fi Hospital, School, Builings etc.??? But, in India, except for giving or ARRANGING two square meals for POORS WHO TRUELY CARES ABOUT POOR??????????????????
Once Again, I can proudly say JAI HO! With this scenario, we will become a Super Power????
Re: clean Indian Real Estate Sector
by pravin sarode on Feb 19, 2011 05:14 AM
send all aid of revenue minister of maharashtra with a raja he is modern day sahukar
Re: clean Indian Real Estate Sector
by Sachin on Feb 15, 2011 06:39 PM
and most of this black money belongs to the politicians & also they have very good relations with the builders so this will never happen.
I dutifully repay my loan ahead of time and get slapped with a "penal interest". On the other hand, if I don't pay my loan again I have to pay "penal interest". What an idiotic concept and an equally idiotic name. The reasoning given for charging this amount is equally stupid. How can you forecast your revenue 20 years ahead and slap me with a penalty for pre-payment?
There can at best be a ban on pre-payment for the first three years or five years depending on the duration of the loan. Do the banks want people to be eternally debt-ridden ?
Re: Penalty ? What an idiotic term !
by Maximum on Feb 14, 2011 06:57 PM
Actually there is no penality for prepayment upto Quarter of your loan in most banks
Re: Re: Penalty ? What an idiotic term !
by Ketan Khapre on Feb 14, 2011 07:30 PM
well as far as my knowledge goes you can pay upto 10% of loan amount in addition to your EMI's without pre payment charges !!
All home loan borrowers are aware that in the initial few years it is the interest component that forms a major part of EMI than the principle. So when prepaying the loan the higher interest component of EMI itself works out to an additional 3 to 4% rate of interest. Consequently pre payment penalty charges are a loot of the customer
