Adarsh Malhotra (Director) 12 November 2012
I had taken a loan on floating rate of interest for purchase of a commercial property from Tata Capital Ltd. in june 2011. The product is called as Home Equity- Commercial. Now I want to foreclose the said loan account from my own sources as the rate of interest is quite high, Tata capital is aking for 2% of the balance amount as foreclosure charges. I beleive that in view of guidelines of Reserve bank of India, these charges should not be leived. Pl guide.
Advocate Rohit (Advocate) 12 November 2012
kindly read your agreement first and check whether the tata capital has any such right or not????
ifyes, then you need to negotiate the same and try to resolve the issue of foreclosure charges otherwise you may go to RBI website and find out such details.
Regards,
Advocate Rohit Dalmia
9324538481
Mumbai
Kumar Doab (FIN) 12 November 2012
RBI circular Dated June5th, 2012 is attached, specifying “It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect.”
You have availed loan in 2011 on floating rate of interest.
* For fixed-rate loans, banks will continue to charge the prepayment penalty unless paid by own fund
* Home loan borrowers with dual rate loans from housing finance companies will still have to pay a penalty for early payment
* RBI says the removal of prepayment charges will reduce discrimination between new and existing borrowers and competition among banks will result in finer pricing of floating rate loans
* However, foreclosure does not make much sense if the borrower prepays after 10 years of the existing loan as he would have paid the maximum interest by then
* The new lender will charge a processing fee for the loan and the borrower must calculate the net gain of switching the loan
You need to take up matter with lender to waive off the foreclosure charges.
You may plead reasonableness of charges. The lender may accede.
Arockia Sagayaraj (HR Professional) 19 September 2014
Dear Sir, I have taken personal loan with icici bank on Feb 2013 for 3 yrs tenure and almost I paid 20 months of EMI till Sep 2014. now I would like to go for preclosure of the personal loan but when I approch the bank they are asking me to pay the total outstanding amout whcih includes interest for the for 3 years and the preclosure charges of 5500/-. my question is should i pay only outstanding principal amount as of today or should I need to pay the interest calculated for the another 16 months as well? Which makes so sense. Can you please advise on this issue?
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