HDFC is inappropriate in charging the prepayment charges of 2.25%. It is against the RBI guidelines. It's a two way loot of the existing HDFC Home Loan customers i.e. either they keep on paying the high interest rates or pay illegal ransom in form of Prepayment penalty for shifting to better rates offered by other banks.
When interest rates were increased by RBI then HDFC use to increase the rates by more % than what RBI hiked and when it comes to reducing the rates they keep mum. In last one year RBI has reduced interest rates by 4% but HDFC has reduced the rates by just 1% and keeping the rest of the 3% with them.
Now if i want to shift to another bank offering resonable rate then they are charges pre-payment penalty.
Now, I am going to file a case in Consumer court against this LOOT. because some other fellows have also protested in court and won. see this case for reference...
In the case of State Bank of India Vs Usha Vaid & Anr the National Consumer Disputes Redressal Commission termed prepayment penalty for home loan as unfair and restrictive trade practices. The Commission asked the bank to refund the pre-payment charges collected from Vaid, who had shifted her loan to another bank. It upheld that Consumers’ right to avail loans at lesser rate of interest can’t be curtailed by such prepayment clauses. SBI SLP (Civil) 16345 of 2007 against the Commission order in the Supreme Court has been dismissed vide SC order dated 19.09.2008.
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