There is a good news for home loan borrowers this diwali season!!!!
The National Housing Bank has instructed in it’s circular to all it’s 54 housing finance companies as to not to charge pre-payment penalties for those home loan borrowers who are on floating interest rate.
The 54 housing finance companies cannot levy prepayment penalty on pre-closure of housing loans under the following situations:
1.Where the housing loan is on floating rate basis (pre-closed through any source) This means even loan taken over by other financial institutions.
2.Where the hosing loan is on fixed interest basis and the loan is pre-closed by the borrowers out of their own sources.
The expression ” own sources ” for this purpose means any source other than by borrowing from a Bank/ HFC/NBFC and or a financial institution.
3.It is , accordingly advised that pre-payment levy or pre-closure charges shouldn’t be levied on the borrowers in the above cases. All HFC;s are advised to ensure compliance of the above with immediate effect.
4.Please note that non-compliance will attract penal provisions under the National housing Bank Act, 1987.
Good to hear. Well written and you stated very well this serious topic. I salute your work. Thanks!
I think it is great how much thought and planning you have put into this. This is very helpful to everyone.
It’s a good initiative, I went to your blog and I appreciate how you give back to the community. I agree with you, there are so much thinks to be done.