Prepayment Charge for takeover of loan by SBI from Syndicate Bank

POSTED BY roshan ON February 6, 2014 4:15 pm COMMENTS (5)

Background : I had taken a floating housing loan from syndicate bank in 2006. I am planning to switch over to SBI Maxgain .

Syndicate bank manager said that i would need to pay a foreclosure charge of 1% in case the loan is taken over by another bank . (This is mentioned in my sanction letter of 2006). However i have been reading that RBI has abolished pre-penalty charges. Does this also apply for takeover of loans by another bank?

5 replies on this article “Prepayment Charge for takeover of loan by SBI from Syndicate Bank”

  1. ashalanshu says:

    Dear Roshan, thanks for the update.

    Thanks

    Ashal

  2. ashalanshu says:

    Dear Roshan, prepayment charges may be applicable in case of loan take over.

    Thanks

    Ashal

    1. roshan says:

      Hello Ashal,
      Just got a written confirmation from syndicate bank indicating that no prepayment charges are applicable for a house loan with floating rate of interest . This applies to loan take overs also

      Thanks,
      Roshan

  3. Credexpert says:

    Dear Roshan,

    As per RBI guidelines, banks will be mandated not to levy foreclosure charges or pre-payment penalties on home loans extended on a floating interest rate basis.

    This link could help http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=26314

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

    1. roshan says:

      Dear credexpert,
      The manager says this may be applicable only if the funds are from my own sources and not if the loan is taken over by another bank. There is some ambiguity regarding this.

      Thanks,
      Roshan

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