20 October 2011

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Regulator National Housing Bank banned levy of pre-payment penalty on housing loans

Regulator National Housing Bank banned levy of pre-payment penalty on housing loans

If you have bought your home on EMI then as per the new norms of Regulator
National Housing Bank there will be no penalty charges if you pay back your loan amount by taking money from other banks or finance company.

This rule will apply to all 54 housing finance companies.

Regulator National Housing Bank has asked all housing finance companies to see that
All borrowers pay the same interest rate irrespective of when the loan was taken.

Regulator National Housing Bank has banned the levy of pre-payment penalty.

The two decisions, notified on Wednesday, will cover all housing finance companies ranging from HDFC to LIC Housing Finance and Dewan Housing Finance.
They come into effect immediately

Banking Regulator has not notified above norms but in next few days Banking Regulator will also notify the norms.

Banks and HFCs levy pre-payment penalty of up to 4%, which often resulted in borrowers continuing to pay higher rates. "

The housing finance regulator said HFCs will no longer levy any fee on floating rate loans.
In case of fixed rate loans, it has made a distinction and only those borrowers who pay from their "own sources", such as savings or even loans from relatives, will be exempted from payment of penalty.

In case borrowers shift to another bank or HFC, the penalty will be applicable.

NHB has said that any violation will attract penal action.

Reality views by sm –
Thursday, October 20, 2011

Tags – Ban Pre Payment Loan Levy Regulator National Housing Bank


Anonymous,  April 26, 2012  

Would the teaser rates for for the first year or two disqualify the loan from the benefit available to Floating Interest Home Loans of No Foreclosure Charges? Please clarify.