Is Pre payment charges are applicable?

POSTED BY apna bala ON June 9, 2012 10:53 pm COMMENTS (4)

Dear Sir,
I have taken Home loan from SBT in Dec 2010 under the scheme of Aishwarya home loan where the interest for first year is 8% and second and third year is 9 %.after the third year is 2.5% above the SBT base rate.
Can i am prepay some amount apart from EMI , Is it possible to switch over to regular loan .Kindly advice.
Regards.
Apna bala

4 replies on this article “Is Pre payment charges are applicable?”

  1. apna bala says:

    Dear Mr.Ashal Jauhari,
    Thank you so much for your guidance.Really it is a very useful tips to me.
    Regards,
    Apna bala

  2. apna bala says:

    Dear Mr.Ashal Jauhari,
    Thank you so much for your reply. Regular loan-I would like to go to prevailing market (base) rate.I feel SBT base rate +2.5 % is high for the rest of the home loan period.

    Your suggestion on increasing EMI a bit seems to be affordable.After going through this blog forum , i understand it may help reduce in loan period, Am i right?

    Thanking you once again,
    Apna Bala

    1. Dear Apna Bala, Please check with your bank. By paying a nominal fee around 0.5 to 1% of your O/S loan amount + service tax there on, you can switch over to a new rate say base + 1% depending upon the bank’s policy for such switch over.

      It’s very much possible with most of the bank.

      As of now your interest rate is already lower (also fixed) so I w’d like you to keep the things as it is as of now. Opt for interest rate switch over at the end of fixed rate term. say 1-2 month early.

      Thanks

      Ashal

  3. Dear Apna bala, Can you elaborate on this regular loan thing? If you are prepaying only a partial amount, there should not be any penalty on you.

    If your cashflow permits, you can even opt to increase your EMI a bit say 12K instead of 10K earlier.

    Thanks

    Ashal

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download Our FREE Ebook!

Available only for first 100 people today

Download Our FREE Ebook!

Available only for first 100 people today