Penalty on loan repayment

The Banks charge some penalty if borrower repays full or part of the loan before time (to be clear I am not talking about EMI payment). Repayment could be good for the borrower if he receives some surplus funds which he does not need because by repaying the loan he can reduce his EMI or lower the interest on his loan. But this is kind of optional which a broower may opt for or not.

 

On other hand, if the person wants to sell the property and there is loan on the property then it is must, I guess, to settle/repay the loan before property can be sold. So I want to know if borrower has to pay penalty even in this case of repayment. This case of repayment is MUST.

 

Well, I want to sell the property and have no problem to repay my loan but why should I pay the penalty.

 

Will I have to may penalty in my case?

Replies (2)

Dear P Gupta 

                           It is all depend upon the terms and conditions of the loan which is taken by you. please send me detail about the bank which you taken loan and what is the terms and conditions of it. sothat it can advise you. my email id is sachinagarwalcallb @ gmail.com

Dear Sachin,

 

Thanks for replying.

 

The very first question is if penalty is applicable in the second scenario, which is my case as well, at all or not. According to me, there should be no question of penalty because it is a must do for the borrower. Do you agree? What does law say about this?

 

In the first case penalty may depend on the terms and conditions, negotiations etc. I can understand and accept this.

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