[Resolved]  HSBC Personal Loan Complaints - 4%+s. T. Prepayment Charges Of Total Amt. — HSBC Personal Loan complaints

HDFC Car Loan — 5% prepayment charges of total amt.

i took a h.d.f.c bank car loan for my scorpio car for five years and which i m paying regularly and after completing one year i wanted to prepay the total principal left but got shock of my life when bank informed me that i have to pay 5% of the total principal amount left with other charges. as i was not informed by anybody at the time of giving the loan that they will charge for prepayment also.

Private banks have occupied the space of old proverbial mahajans/baniyas (I am one too though only by caste :) ), whereby they do anything possible to fleece the customer and increase their ROI. Prepayment penalty is one such thing.

There shall never be a mention of Prepayment charge/ penalty even once at the time of giving a loan. However, most car loans are typically closed at end of 2-3 years in today's enviroment as people change their cars more frequently now. At this time you realise that there was a blank in your loan agreement talking about prepayment charge/ penalty which they did not show you but it got filled sometime after you got the loan and they put this prepayment charge/ penalty as 4-5% (5% nowadays with private banks).

I myself worked with a private Bank at the time of taking my car loan and upon asking, I was told that prepayment charge/ penalty was zero for bank employees. However, I did not figure out what'd happen if I left the services of the bank and to my utter surprise, when I went for prepayment I was charged 4% as at that point I was not an employee of that Bank anymore.

As such banks are right in charging a prepayment charge/ penalty to take care of fluctutations in liquidity but very often this factor is accounted for in the pricing of the loan itself. A prepayment charge/ penalty is just additional income and given private banks' hold on the market they were able to charge this. Besides, it started with a 2% amount years ago and some smart managers were able to convince top management to hike it to a level where they'd loose brand equity of the bank for short term ROI increase and career appreciations.

Today, when SBI is all out to gain market share by offering low rates, these private banks would soon be seen rolling back prices as well as prepayment charge/ penalty to make themselves look more attractive than SBI. However, by that time, millions of customers wouod have been duped by this charge.

I plan to take this issue to banking ombudsmen one day and would look for support from people like you. I am putting this also on my blog InvestingMoneyDOTblogspotDOTcom . Do visit and add your remarks too

And yes, this forum "consumercomplaints" seems to be a good idea. Would like to see it gaining strenth in protecting consumers from getting fleeced like this. Till such time : "Let the Buyer Beware" :)

Besides, I advise you to start negotiating with multiple banks for your loan in order to get rid of this clause plus favourable rates as well. Good Luck

i want to clear the personal loan please send the out standing details of my personal loan account as early as possible.i went to your hyderabad (somajiguda) branch somany times but they are not respond properly.So i request you to send the total outstanding statement for prepay.