Housing loan prepayment
Kalyan Ghosh
(Querist) 12 April 2013
This query is : Resolved
Respected Sir,
My son has taken a Home Loan from HDFC, Hyderabad for a property at Hyderabad.I
am from Kolkata. My son is abroad. My question is whether during his absence I can make prepayment of Principal Amount in favour of his Loan A/C No at any of the HDFC Kolkata office.HDFC IS NOT REPLYING
I am a Retired Govt Official at a Senior level and to the best of my knowledge Near
Relatives(Father to Son)Can Make Prepayment in Favour Of the Son WITHOUT ANY PREPAYMENT PENALTY.AS PER NATIONAL HOUSING BOARD CIRCULAR PAYMENT FROM OWN SOURCE SHOULD BE TAKEN WITHOUT ANY PREPAYMENT PENALTY WHETHER Father's contribution should be considered as from own source of the Borrower.Opinion of some Financial Consultants AGREE WITH THIS. My
only object is to cut down the Interest Amount as much as possible.
Please help me with necessary circulars
Advocate M.Bhadra
(Expert) 12 April 2013
You can meet with Sr Officer with documents at Kolkata office.
If you have a complaint against only scheduled bank on any of the above grounds, you can lodge a complaint with the bank concerned in writing in a specific complaint register provided at the branches as per the recommendation of the Goiporia Committee or on a sheet of paper. Ask for a receipt of your complaint. The details of the official receiving your complaint may be specifically sought. If the bank fails to respond within 30 days, you can lodge a complaint with the Banking Ombudsman. (Please note that complaints pending in any other judicial forum will not be entertained by the Banking Ombudsman). No fee is levied by the office of the Banking Ombudsman for resolving the customer’s complaint. A unique complaint identification number will be given to you for tracking purpose.
Complaints are to be addressed to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located. Complaints can be lodged simply by writing on a plain paper or online at www.bankingombudsman.rbi.org.in or by sending an email to the Banking Ombudsman. Complaint forms are available at all bank branches also.
Complaint can also be lodged by your authorised representative (other than a lawyer) or by a consumer association / forum acting on your behalf.
If you are not happy with the decision of the Banking Ombudsman, you can appeal to the Appellate Authority in the Reserve Bank Of India
The Banking Ombudsman.
C/o Reserve Bank of India
15, Nethaji Subhas Road
Kolkata-700 001
Tel No.(O) : (033)2230-4982
Fax No.033-22305899
The Banking Ombudsman,
C/o Reserve Bank of India
6-1-56, Secretariat Road
Saifabad,
Hyderabad-500 004
Devajyoti Barman
(Expert) 12 April 2013
After the recent RBI guidelines no penalty can be imposed for repayment.
You have to talk to HDFC officials , not Banking Ombudsman.
If Bank do not agree, you can lodge case in consumer forum.
Another option is to get POA from your son and do the necessities on his behalf.
Kalyan Ghosh
(Querist) 12 April 2013
Actually Housing Finance Companies like HDFC(HDFC and HDFC Bank are different) is under the control of National Housing Bank(a subsidiary of RBI) whereas for Banks offering Housing Loans RBI is the regulator.Banking Ombudsman scheme is under RBI and not NHB
AS PER NATIONAL HOUSING BANK CIRCULAR PAYMENT FROM OWN SOURCE SHOULD BE TAKEN WITHOUT ANY PREPAYMENT PENALTY.The question is WHETHER Father's contribution should be considered as from own source of the Borrower.Opinion of some Financial Consultants AGREE WITH me. Please clarify regarding father's contribution in this case ,if possible.As per prevailing Income Tax Rules gift from father is allowable.What is the rule for this in housing loan?
malipeddi jaggarao
(Expert) 12 April 2013
The best recourse is go to HDFC Bank and offer pre-payment and ask them the conditions. They have to clear your doubts at that time. Whether it is own source or other source private banks have their own rules. While signing the documents no borrower demands for a copy of the document executed nor even read the contents. The above course of action will give you the required solutions. You need not hypothetically think about the issue. Ombudsman mechanism also will not give you required relief.
Kalyan Ghosh
(Querist) 12 April 2013
For help
a) I have got the requisite circular No-NHB(ND)/DRS/POL-No 43/2011-12 of NHB(Regulator for Housing Finance Cos) WHICH CLEARLY STATES THAT HFCS CANNOT CHARGE ANY PREPAYMENT PENALTY WHERE THE HOUSING LOAN IS ON FLOATING INTEREST BASIS(PRE CLOSED THROUGH ANY SOURCE).Obviously father's source(gift) is also permitted as per income tax Rules
b)Another lawyer has commented
1. Yes. You can very well deposit the EMIs in your son\'s loan account & also prepayment amount,
2. These payments will be considered as paid by your son to the HDFC Bank.
That private banks have their own rules PROBABLY DOES NOT APPLY here as HFCs cannot overrule their Regulators
Moreover Financial Consultants AGREE WITH me. Ombudsman mechanism also gives us required relief,as has been proved in many cases
Actually as a common man I think the best advice can be given by CONSULTANTS (who are within this expertise and who can readily give the necessary circulars,case histories etc)
Isaac Gabriel
(Expert) 12 April 2013
Did the HDFC refused payments in your sons loan account? You can remit the amount in the loan account from anywhere.Learned Malipedi Jaggarao has aptly advised.Abide by it.
V R SHROFF
(Expert) 13 April 2013
Pay 95% of balance Loan, will get relief of 95% of Interest,
Later raise this Question of Total pre payment.
bank will act as per current rules.
you can pay at any branch.
Kalyan Ghosh
(Querist) 13 April 2013
For help
I am not talking of total prepayment,actually I am talking of part payment of Principal Amount.Already to minimise the total tenure and for early disposal of the loan my son has made part payment of Principal Amount and increased the EMI(more than due)which are the usually adopted methods.Normally everybody tries to clear the loan as early as possible The question is whether
1. Whether as father I can very well make prepayment in my son\'s loan account
2. These payments will be considered as paid by my son to HDFC without any PREPAYMENT PENALTY as per present practice
(ALREADY SUPPORTED BY ONE KOLKATA HIGH COURT ADVOCATE)
3.As per circular No-NHB(ND)/DRS/POL-No 43/2011-12 of NHB(Regulator for Housing Finance Cos) WHICH CLEARLY STATES THAT HFCS CANNOT CHARGE ANY PREPAYMENT PENALTY WHERE THE HOUSING LOAN IS ON FLOATING INTEREST BASIS(PRE CLOSED THROUGH ANY SOURCE).Obviously father's source(gift) should also be permitted as per income tax Rules.
With thanks
H.M.Patnaik
(Expert) 14 April 2013
Mr. Ghosh,
Your only doubt as per the query is whether deposit of any sum in the HB loan a/c by father of the loanee would make you eligible to exemption from pre payment penalty/ charge by HDFC.
In this case,if you are a guarantor/ co- borrower, you are free to repay the loan either in full or part. Otherwise, your Son, the sole borrower has to authorise you to handle the loan a/c in his absence from the country.
