Prepayment Penalty not to be imposed on Floating Interest Rates
No Comments Sub Category:Uncategorized Posted On: Oct 24, 2011
The Reserve Bank of India (RBI) has advised the housing banks not to impose a prepayment penalty if floating rates of interest are assured and also there will be absolutely no penalization for such borrowers. However the concern is different in terms of fixed interest loans wherein it involves on going tie up the housing finance companies and also the loan payer. Also a strict regulation has been passed by RBI which says that, the loan payer is never allowed to repay the prevailing loan by taking assistance of fresh loans from the other banks.
This might pop with a difficulty in proving the source of the loan borrower. However RBI has given a stretch of freedom to the finance companies to come up with a compromise formula in case of the borrower fails to make payments to them. It sounds meaningless to burden the loan borrower with high rate of interest in today’s competitive financial market. Also home loans being a part of happiness in many families.
Source: Hindu Business Line
Tags:
Finance companies, Fixed interest loans, Floating Rate Home Loans, Housing banks, Indian financial market, Reserve Bank of India
