The RBI will not enable banks to levy a prepayment penalty on housing loans nevertheless they may levy a penalty on other loans. Some loan providers try not to charge a prepayment penalty in the event that quantity compensated will not go beyond 25% associated with amount that is outstanding the beginning of the season.
7. KNOW THE SMALL PRINT
Loan documents don’t make for light reading. Paragraph after paragraph of legalese printed in a tiny font can be described as a placed down. Yet, see the conditions and terms very carefully to prevent unpleasant surprises. Bengaluru-based Subhash Shetty requested a unsecured loan of rs 1 lakh but received a cheque of just Rs 91,800. The financial institution had deducted Rs 5,152 as an upfront interest cost and a yearly insurance premium of Rs 3,047.
Shetty had finalized in the documents without going to the terms and conditions. Some loan providers are notorious for sliding in clauses which can be packed resistant to the debtor. Before you sign it if you are unable to understand the legalese, get a financial advisor or chartered accountant to take a look at the agreement. (more…)