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.
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.
    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.



  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.



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