Prepayment clauses are restrictive trade practices, which restrict the consumers' right to avail home loans at a lesser rate of interest !

National Consumer Disputes Redressal Commission had, in a recent case ruled that prepayment clauses are restrictive trade practices, which restrict the consumers' right to avail loans at a lesser rate of interest.

Not only that, it called upon the country's largest bank, State Bank of India, to refund the Rs 40,000 it had collected as pre-payment charges from Usha Vaid, who had shifted to another bank.

The forum said it appeared that this amount was charged as punishment to the consumer who sought transfer of the loan amount to another bank, giving a lower rate of interest.

Now, The Supreme Court will decide whether it is right for banks and housing finance companies to charge pre-payment fees on customers repaying loans ahead of their tenure.

What is your opinion? Please, let me know!

A heavy price?- Pune-Cities-Property-Personal Finance-The Economic Times

Tags: consumers' right, restrictive trade practice, National Consumer Disputes Redressal Commission, pre-payment charges,