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POSTED BY ON August 26, 2012 9:00 pm COMMENTS (3)
I had applied for a Home Loan with HDFC.
The first year rate was fixed at X%, second year at Y% and after that (now) it is floating at 12%. I am in the third year on this loan.
Now,I have read about RBI’s abolishment of pre-payment penalty charges for floating rate loans.
1) Does this apply to my kind of home loan?
2) Is this relevant if I switch my home loan from HDFC to SBI. If so, will the pre-payment (settlement) that SBI will pay to HDFC be penalty free?
My current rate on HDFC is 12% floating. SBI is offering 10.4% floating.
If there is any other advice that you would like to give me, please feel free to do so.
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Dear Kartik, HDFC is an HFC & hence it’s regulator is NHB not RBI. Till date NHB has not clarified on dual rate loans. so in your case if you opt to switch to SBI, prepayment penalty ‘ll be there.
Is there way out? Yes, please contact HDFC & pay the conversion fee which is 0.5% + service tax there on of the existing loan amount. You ‘ll get the new rate which is 10.5-10.75%. In my opinion, it’s better option than switching to SBI.
Thanks
Ashal
Karthik
You are talking about teaser loans ,even that comes under law now ,
http://www.livemint.com/2012/06/17195809/No-prepayment-charges-for-dual.html
Dear Kartik,
There would be no charges on prepayment or loan transfer as has been said by RBI recently. Even Jagoinvestor has an article on that. I am providing the link below.
http://jagoinvestor.dev.diginnovators.site/2012/06/prepayment-charges-abolished-by-rbi.html