problem with commercial and residence???

chaitu..... (Querist) 16 September 2010 This query is : Resolved
dear sir,
we have taken bank loan for HOUSING LOAN, but we gave it for commercial purpose(for school) now, the bank officers say that it is a crime, but we said, u dont hv any prob, regarding the loan payments and we also paying every month. loan amt:15 lakhs????

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Parthasarathi Loganathan (Expert) 16 September 2010
Housing loan is generally sanctioned for residential purpose for which necessary undertaking papers are obtained from the borrower for the simple reason that it falls under Priority Sector Advance enjoys concessional rate of interest. If in case, it is converted for commercial use, borrower needs to intimate the bank in writing and seek for charge of commercial rate of interest which is higher. The author should not enjoy double benefits.

s.subramanian (Expert) 16 September 2010
That's expert advice.WEll done Mr.PL.

Devajyoti Barman (Expert) 16 September 2010
Yes, agree.

Rajeev kulshreshtha (Expert) 17 September 2010
I also agree.

DEFENSE ADVOCATE.-firmaction@g (Expert) 17 September 2010
Still the problem will be with the civic authorities and not with bank as long as you pay the dues.