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    May 2, 2012

    No pre-payment penalty on home loan

    The information is given by Minister of state of finance in Lok Sabha that no pre-payment penalty will be levied on house loan. Lok Sabha press information bureau has issued a press release in this regard. The press release no. 15 dated 27-04-2012 is as follows.


    LOK  SABHA
    “15”
    www.pib.nic.in
    PRESS INFORMATION BUREAU
    GOVERNMENT OF INDIA
    ***
    PRE-PAYMENT PENALITY ON HOME LOANS
    New Delhi, Vaisakha 07, 1933
    April 27, 2012
    Reserve Bank of India (RBI) in its monetary policy, during 2012-13 has announced not to permit banks to levy foreclosure charges/pre-payment  penalties on  home loan on a floating interest rate basis.

    Further, National Housing Bank (NHB) which regulates the Housing Finance Companies (HFCs) have advised them not to levy pre-payment charges on the borrowers where the housing loan is on floating interest rate basis.

    Further, NHB has also advised the HFCs not to levy any pre-closure charges even where the housing loan is on fixed interest rate basis and the loan is pre-closed by the borrowers out of his own sources.

    This information was given by the Minister of State for Finance, Shri    Namo Narain Meena in written reply to a question in Lok  Sabha today.

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