Foreclose charges - EMI | Any idea on why does ...

Foreclose charges - EMI | Any idea on why does bank charges 3-5% extra if we wish to foreclose EMI ????????

Score: 1 Votes: 1
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Deal Subedar
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I did 3 emi transactons, from different cards (SBI / RBL )

almost 60% has been paid up. Now I am planning to fore close as home loan emi also about to start

Creditcard companies asking for additional 3-4%, if I wish to foreclose. Cant understand logic behind this

6 Comments  |  
4 Dimers
Draw
Deal Colonel
10
1,179
51982
1042

When u have availed the EMI
u done the contract for x amount for y month ,
So any additional amount ia not accepted, this is absurd but I have to face this as a consumer.

Perhaps, the free cards and offwrse are compensated from consumers bearing the intt. Or defaulted.

Cross subsidization happens every where.

Window programme, anti virus, shopping mall, McD , it depends on the. Business model and regulations.

Missing
Deal Subedar
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141
1606
13

when you enter into EMI, you comit to the bank to give certain amount of profit (EMI Rate – actual cost of capital). When you forclose, there is a loss of profit to the bank. The charge is compensation for loss of revenue. Most PSU banks do not have forclosure charges.

Draw
Deal Colonel
10
1,179
51982
1042
@panchabhut wrote:

when you enter into EMI, you comit to the bank to give certain amount of profit (EMI Rate – actual cost of capital). When you forclose, there is a loss of profit to the bank. The charge is compensation for loss of revenue. Most PSU banks do not have forclosure charges.


Prepayment penalty stopped for home loans
But CC EMI s are still gimmick ,
Flat rate, processing fee etc., so not standardized,
Different rates depending upon the marketing, credit profile and even for which item EMI is being used !

Missing
Deal Subedar
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2
1226
6
@[email protected]_0_0_D wrote:

@panchabhut wrote:

when you enter into EMI, you comit to the bank to give certain amount of profit (EMI Rate – actual cost of capital). When you forclose, there is a loss of profit to the bank. The charge is compensation for loss of revenue. Most PSU banks do not have forclosure charges.


Prepayment penalty stopped for home loans
But CC EMI s are still gimmick ,
Flat rate, processing fee etc., so not standardized,
Different rates depending upon the marketing, credit profile and even for which item EMI is being used !


Standrd Chartd stopped charging foreclosure charges..

Break the bottle
Deal Captain
2
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9054
53

AFAIK, SBI does not have any foreclosure charges.

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Draw
Deal Colonel
10
1,179
51982
1042
@gambitrite wrote:

AFAIK, SBI does not have any foreclosure charges.


= bola

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