P Gupta (practice) (75 Points)
30 March 2009Hi,
Few years ago I took loan for the property. If I repay the loan then I have to pay the penalty. Isn't it? Isn't it the case with all the banks/institutions?
If I sell the property now, do I have to repay the loan in that case or I can continue to keep the loan? If I have to clear out the loan after selling the property, then I would like to know if I have to pay penalty in this case as well?
Thanks in advance for your kind answers.
CA CS CIMA Prakash Somani
(Landmark Group)
(23502 Points)
Replied 30 March 2009
Can you better elaborate your query please ???
Taranjit Singh
(Chartered Accountant)
(6108 Points)
Replied 30 March 2009
Please ask in more detail......please
P Gupta
(practice)
(75 Points)
Replied 31 March 2009
I thought it was sufficient for gurus. Anyhow..........
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.
But 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.
CAclubindia
