Prepayment penalty: This is a penalty charged for repaying a loan too early. Many borrowers are taken by shock, when they are asked to shell...
Prepayment penalty:
This is a penalty charged for repaying a loan too early. Many borrowers are taken by shock, when they are asked to shell out about 2% of the loan outstanding as a penalty for repaying ahead of time. It is seen that most homeowners prefer closing their home loans as soon as they get some windfall. Some banks change this penalty only during the initial 5 years of the loan tenure. Others allow partial repayment in stages.
This penalty is usually based on percentage of the remaining loan balance. Most items in a loan agreement are subject to negotiation. So if the borrower has not yet signed the loan papers, get down to hard bargaining.
This is a penalty charged for repaying a loan too early. Many borrowers are taken by shock, when they are asked to shell out about 2% of the loan outstanding as a penalty for repaying ahead of time. It is seen that most homeowners prefer closing their home loans as soon as they get some windfall. Some banks change this penalty only during the initial 5 years of the loan tenure. Others allow partial repayment in stages.
This penalty is usually based on percentage of the remaining loan balance. Most items in a loan agreement are subject to negotiation. So if the borrower has not yet signed the loan papers, get down to hard bargaining.
