NEWS & ADVICE : HOME LOANS
Prepayment penalty not against competition laws: CCI
By Joseph Samson
Dec 8, 2010
Print    Email    RSS   

The Competition Commission of India (CCI) has directed that prepayment penalty charged by banks on home loans is very much within the competition laws.

The ruling by CCI comes in response to the complaint filed by a borrower, Mr Neeraj Malhotra against Deutsche Post Bank Home Finance Ltd for charging him with prepayment fees. The bench of four members of CCI said that the levy of charge by the bank was in no case violating Section 3 and 4 which relate to anti competitive practices and use of dominant position.

Two members of the bench however said that levying charge of this nature should be discontinued by banks, the order released on CCI website read.

Prepayment penalty currently ranges in between 1-2% for most banks. Using this charge banks aim to recover the losses in terms of interest occuring due to preclosure of loan.

However there are some lenders who charge this fee only in case the customer opts for refinancing his home loan amount by switching to another lender offering lower interest rates.


 


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Complete Guide to the Home Loan Process in...
Pre-pay your home loan
Prepayment on loans: 'To do or not to do'
Choices available for home buyers
Bank of Maharashtra reduces home loan rates


PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive