6 replies on this article “Is prepayment penalty on home loan top up loan allowed by RBI ?”

1. Credexpert says:

   February 4, 2014 at 7:25 pm

   Dear Jatin,

   If both the loans are floating interest rates and related to your home loan, then yes the prepayment penalty should be abolished.

   Regards,
   Credexpert
   http://www.credexpert.in

   Reply
   1. jrd999 says:

      February 5, 2014 at 9:34 am

      thank you Credexpert, also RBI’s press release dated 31/01/2014 has asked Indian Bankers Association to remove prepayment penalty on all floating rate loans(not only home loans) at the earliest

      Reply
2. jrd999 says:

   February 4, 2014 at 2:36 pm

   thanks,will do

   Reply
3. ashalanshu says:

   February 4, 2014 at 2:30 pm

   Dear Jatin, Please try to negotiate with your bank on the basis of response of what other banks are saying.

   Thanks

   Ashal

   Reply
4. ashalanshu says:

   February 4, 2014 at 2:02 pm

   Dear jatin, top up loan is although given on home loan rates but it’s a secured personal loan in a sense, hence it’s not eligible for prepayment penalty waiver. so you need to pay the penalty if you want to preclose.

   Thanks

   Ashal

   Reply
   1. jrd999 says:

      February 4, 2014 at 2:15 pm

      Thank you Ashal, but i checked with other banks like HSBC,SBI and they are of the opinion that prepayment penalty on floating rate home loans of any kind is not valid,only Loan against property (LAP) prepayment attracts penalty.
      hsbc,sbi,bob and icici dont charge prepayment penalty on top up and the rbi circular says that with a view to bringing in uniformity across the banking system prepayment penalty has been abolished on all floating rate home loans,so i dont think some banks can interpret it differently from others

      Reply

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