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POSTED BY ON November 27, 2012 1:36 pm ONE COMMENT
Hello, I have a home loan (so called teaser loan) from Axis bank (total of 9 years) where initial years were fixed interest rate (approx 8.5%) and then floating…
Now (after 4 years) floating interest rate running is actually around 10.75% while bank is still continuin charging 11.25%, (I was under the assumption that bank will auto-apply interest rate whenever it goes down, just like they do it automatically when it goes up)
When asked about reducing 11.25% back to 10.75%, they said you need to pay 0.5% of principal outstanding + S.T.
Isn’t (as per RBI/NHB) no penalty charges shall be there for a case where you moving from higher floating rate to lower floating rate (that too when sticking with same bank and paying from your own sources)?
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Dear Mr. Jain,
What you need to do is to check the agreement you signed when you took the loan – what does it say about the interest rate and fees, post the “teaser” rate period? If the agreement clearly mentions a fee (generally or specific amount), then you will have to pay the fee as applicable. If the agreement is silent then you should ask the bank why you need to pay when you are in the “floating” rate phase of your loan as contracted earlier. In any case if the floating rate currently is 10.75 % and the agreement you have signed clearly specifies that floating rate as applicable will also be charged to you, then you are within your rights to demand that your rate is also brought down to 10.75%
Regards,
Credexpert