• Foreclosure charges by NBFC in case of LAP

I took loan from Cholamandal finance in 2014 and now I wish to foreclose it .Loan is in my name and my company is co applicant because I'm a business man. Can they charge foreclosure charges at 4 % of the balance amount
Asked 11 days ago in Business Law from Mumbai, Maharashtra
Please see the agreement documents you signed if it has a foreclosure penalty clause. In other case you may write to banking ambudsman in this regard and if not satisfied you may go to consumer Rederessal Commission or forum as the value is.
Vimlesh Prasad Mishra
Advocate, Lucknow
1766 Answers
3 Consultations

4.6 on 5.0

No there is no foreclosure charge on lona agaisnt property the charge of 4% can be levied only if the closure is with 12 months from date of loan disbursement.

Rbi circular on foreclosure charge and left of interest.
Shubham Jhajharia
Advocate, Ahmedabad
2148 Answers
8 Consultations

4.7 on 5.0

1. The foreclosure and its terms will depend on the loan agreement.
2 The absence of any foreclosure charge varies with fianance company to another.
3. in most cases it is within 1-1/5 years.
4. Since it is 4 years the financier can not change any foreclosure penalty and if it does you can file case before the consumer forum to avoid this penal amount and for damages.
Devajyoti Barman
Advocate, Kolkata
12551 Answers
161 Consultations

5.0 on 5.0

Company can recover foreclosure charges as per terms of your contract 

2) if there is clause that 4 per cent is payable you ha e to pay said amount 
Ajay Sethi
Advocate, Mumbai
44399 Answers
2577 Consultations

5.0 on 5.0

you  can file complaint before consumer forum to recover foreclosure charges wrongly recovered from you 
Ajay Sethi
Advocate, Mumbai
44399 Answers
2577 Consultations

5.0 on 5.0

RBI does not approve of charging penalty or foreclosure charges.

Lodge your protest with them against their act of charging foreclosure fee @ 4%

You have the option of approach the consumer forum in the instant matter after serving a legal notice upon cholamandalam.
Vibhanshu Srivastava
Advocate, Bangalore
5533 Answers
62 Consultations

4.8 on 5.0

No they will not charge you the penalty of 4%. But please read the documents carefully and if there is a clause, then you can take legal steps. 
Gowaal Padavi
Advocate, Mumbai
188 Answers

4.0 on 5.0

The foreclosure details and the applicable charges may be seen from the loan offer letter itself.
If there any such mention and you have agreed for the said terms, then you have no option than to oblige.

T Kalaiselvan
Advocate, Vellore
34540 Answers
372 Consultations

5.0 on 5.0

If they can't can we file a legal suit in NBFC ombudsman

You can lodge a complaint with the said ombudsman, but what are your grievances, first identify the same.
Ifg the foreclosure rules say that this percentage is leviable for foreclosure within some minimum period from the date of loan, you may hav no cse or grievance even if yo complain.
T Kalaiselvan
Advocate, Vellore
34540 Answers
372 Consultations

5.0 on 5.0

Dear Client,

Prepayment / Foreclosure fees of 2% applicable; unless specifically mentioned in the borrowers’ loan agreement.
Yogendra Singh Rajawat
Advocate, Jaipur
2394 Answers
1 Consultation

4.2 on 5.0

1. Kindly check the "Foreclosure charges" that is recorded in the Loan agreement, signed by you.

2.  IF the Foreclosure charges, are defined as 4% then you will need to pay, ELSE NO.  File complaint with RBI.

Keep Smiling .... Hemant Agarwal
Hemant Agarwal
Advocate, Mumbai
275 Answers
1 Consultation

4.9 on 5.0

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