Getting a home loan can be a huge step towards the dream of having a luxurious house of your own. It's important to understand home loan prepayment rules to make informed decisions about your finances and make the best out of the home loan. Keep reading to know the details.
What are the principles of home loan prepayment rules?
In simple terms, the Reserve Bank of India (RBI) has a set of guidelines set that outlines the process and charges associated with repaying a home loan before the end of the loan tenure. These rules help borrowers reduce the interest on their loan by reducing the tenure.
These rules were made public in a circular titled – “Levy of foreclosure charges/prepayment penalty on Floating Rate Loans,”. It was released in the year 2014.
RBI Home Loan prepayment rules are given below:Banks and HFCs are not allowed to charge a prepayment fee, either on part prepayment or full prepayment in floating rate home loans.
Housing Finance Company (HFC) is not allowed to charge a prepayment fee, when the borrower makes the prepayment for a fixed rate home loan from their own sources of income.
The Bank and HFC cannot levy a prepayment charge, if the home loan has been shifted from Fixed tate to a variable rate.
In case of Fixed Rate Home Loans, HFCs and other financial institutions are allowed to charge a prepayment fee, both on part prepayment and full prepayment.
This is all from my end on home loan prepayment rules.
Apply for a home loan at lowest interest rates with NoBroker Home Loan servicesRead more:
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What are the principles of home loan prepayment rules?
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2023-05-23T14:29:01+00:00 2023-05-23T15:27:01+00:00Comment
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