YOUR QUERIES: Switch to RLLR-linked loan after checking remaining tenure, outstandings

October 6, 2020 4:15 AM

Yes, a repo linked lending rate (RLLR) loan will be more transparent and reflect the existing interest rate scenario. Get the details from other banks and shift your loan immediately.

if your loan is towards the end of tenure and outstanding is small then the efforts for shifting the loan will outweigh the advantages.Some non-bank lenders expressed scepticism about the effectiveness of the scheme.

By Chaitali Dutta

I had taken a loan from Indian Bank. As it is MCLR based I am paying 8.65% interest. I understand RLLR-linked loans come at lower interest rate. Is it good to switch to a RLLR-linked loan?
—Loganathan V
Yes, a repo linked lending rate (RLLR) loan will be more transparent and reflect the existing interest rate scenario. Get the details from other banks and shift your loan immediately. However, if your loan is towards the end of tenure and outstanding is small then the efforts for shifting the loan will outweigh the advantages.

I took a housing loan in 2008 on floating interest rate and last month cleared it by prepaying. The HFC refuses to give my original documents, asking for 2% prepayment penalty. It is showing the clause in the 2008 agreement paper. Did RBI and NHB waive the pre-payment penalty in 2014? Where can I complain?
—Karthik Desai
National Housing Board circular NHB (ND) /DRS/Pol.No.43/2011-12 dated October 19, 2011 states that with imme-diate effect all banks/ HFCs/ NBFCs/ fina-ncial institutions will do away with pre-payment and pre-closure charges on floating rate loans if loan is closed with funds from any source. Refer to this circular and ask your HFC to not insist on a prepayment penalty. https://nhb.org.in/regulation_post/policy-circular/. https://nhb.org.in/Regulation/pol%20cir-43.pdf

I have a credit card outstanding of `70,000 and pay minimum due every month. Should I take a personal loan and pay off the full credit card dues?
—V K Prasad
It will be a better idea to take a personal loan than rotate your credit on your card as interest on credit card is almost three times the interest rate of the former. But pay the EMI on the personal loan regularly.

I have a loan on my flat. Do I have to first clear the loan before selling it?
—Ravi Murthy
Essentially yes, but not from your funds. The buyer will pay the first amount directly to your bank to pay off the loan. Your bank then releases your documents to you or the financier of the buyer. You hand over the documents to the buyer on receipt of the remaining money. Do sign an ‘Agreement to Sell’ with the buyer before initiating any fund transfer.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com).
Send your queries to fepersonalfinance@expressindia.com

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