State bank of Mysore Penalty housing loan pre closure
I also facing similar issue with State Bank of Mysore, They are also demanding for 2% of outstanding amount as pre closure penalty.
I wanted to pre close my housing loan as they are charging more interest rate 10.25%. But same bank is charging 9.25% for some other existing customers but charging more for me alone. When I approached bank manager he is reluctant to resolve the issue from last six months. For new customers the same bank is are offering 8%. This is really ridiculous service by a nationalized and a reputed bank like SBM.
Below is the statement in per SMB Website:
If the loan is pre-closed from own resources for which proof is submitted by the borrower to the satisfaction of the Branch Manager, pre-closure penalty shall not be levied irrespective of the period for which the account has run. In other cases, where such proof is not produced by the borrowers, 2% penalty on the amount prepaid in excess of normal EMI dues should be levied in case of pre-closure of Home loans within 3 years from the date of commencement of repayment
Where as now bank is demanding 2% pre-closure even though I have completed 3 years in loan period