#prepaymentpenalty #foreclosurecharges #personalloans

PREPAYMENT PENALTY FORECLOSURE CHARGES IN LOANS | ALL LOAN DETAILS | PERSONAL LOAN BUSINESS LOANS |
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SANCTION LETTER | HOW TO READ TERMS AND CONDITIONS IN SANCTION LETTER |
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PREPAYMENT PENALTY FORECLOSURE CHARGES IN LOANS – PERSONAL LOANS

Personal loan is a segment where people end up paying lot of interest and charges to the banks. Private Banks in particular and NBFC’s make a lot of income from personal loan borrowers. HDFC Bank is a prime example which makes a lot of income from Personal Loans.

As a customer it is extremely important that you do the necessary research before taking personal loan from any institution. Your first target should be to seek personal loan from government owned banks like State Bank of India, PNB, Bank of Baroda and others.

Public sector banks charge comparatively lower rate of interest on personal loans. Even the other charges are quite lower when you compare it with private banks and other NBFC’s.
Only once you know that you are not eligible for personal loan from these govt. owned banks, then you should try for personal loan in private banks, NBFCs.
Although there are many types of charges/fees like processing fees or upfront fees or file charges attached to a personal loan.
Some charges can be as high as 2%-5% of loan amount.
Prepayment penalty is one such charge which is also known by the name of Foreclosure charges. As a customer you must know how much prepayment penalty or foreclosure charges you may have to pay at the time of prepaying the loans.
The private banks are charging anywhere between 2%-5% of loan outstanding which is a huge amount.
Reserve Bank of India needs to look at this aspect. Being regulator, RBI must ensure that private banks, NBFC’s do not charge exorbitant prepayment penalty/foreclosure charges.
Further all these banks should inform their customers at the time of sanctioning loans regarding such charges.
Prepayment penalty foreclosure charges are levied when you prepay a loan account.
For example, if you have taken a loan for a period of 3 years but wish to prepay the loan i.e. you want to pay the loan before the period of 3 years, in such case bank will charge you prepayment penalty/foreclosure charges in some loan accounts.
This prepayment penalty/foreclosure charges are prevalent in personal loans followed by home loans, loan against property.
The best way to find out how much penalty/charges will be levied if you wish to prepay your loan account is to read the sanction letter.
The sanction letter will have the charges clearly mentioned so that the customer can refer to it.

Thus u can visit the video section of our youtube channel to find the video on what is a Sanction letter and how to read it. Alternatively the link can also be seen in the description box.
If you have any queries, concerns please write to us in the comment box and we shall revert.
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