Bajaj flexi loan

[vineetrathor57]

Hi,
Recently, due to some emergencies, I took a Bajaj Flexi loan and later realized that I made a mistake as it has a 15% interest rate,
I also have a home loan so I have taken a top-up loan on it which they are giving at 9.5% , so I am thinking of doing a prepayment of almost the full amount,
Should I close this loan or keep it active as it has 4.2% foreclosure charges on total amount - 6 lakhs,
Is there any other better way to avoid these foreclosure charges?

And also,I had asked Bajaj for 3 lakh loan but they credited 6 lakhs and said to do the prepayment of the rest amount, this seems wrong, is there any way to take them to court and avoid these foreclosure and other charges?

 

[TaxWiser]

Hi,
Recently, due to some emergencies, I took a Bajaj Flexi loan and later realized that I made a mistake as it has a 15% interest rate,
I also have a home loan so I have taken a top-up loan on it which they are giving at 9.5% , so I am thinking of doing a prepayment of almost the full amount,
Should I close this loan or keep it active as it has 4.2% foreclosure charges on total amount - 6 lakhs,
Is there any other better way to avoid these foreclosure charges?

And also,I had asked Bajaj for 3 lakh loan but they credited 6 lakhs and said to do the prepayment of the rest amount, this seems wrong, is there any way to take them to court and avoid these foreclosure and other charges?

Hi,

I understand your situation and the concerns you have regarding the Bajaj Flexi loan. Here are some points to consider:

1. Prepayment and Foreclosure Charges
- Interest Rate Comparison: Since the Bajaj Flexi loan has a 15% interest rate and your home loan top-up is at 9.5%, it makes financial sense to prepay the Bajaj Flexi loan to save on interest costs.
- Foreclosure Charges: The 4.2% foreclosure charge on ₹6 lakhs amounts to ₹25,200. Compare this with the interest you would save by closing the loan early. If the interest savings outweigh the foreclosure charges, it might be beneficial to proceed with the prepayment.

2. Avoiding Foreclosure Charges
- Negotiation: Contact Bajaj Finance and explain your situation. Sometimes, lenders may waive or reduce foreclosure charges, especially if you have a good repayment history.
- Partial Prepayment: Check if Bajaj Finance allows partial prepayments without charges. You could reduce the principal amount significantly, thereby lowering your interest burden.

3. Legal Recourse
- Loan Amount Discrepancy: If you requested a ₹3 lakh loan but received ₹6 lakhs, this could be a case of miscommunication or error. Document all communications with Bajaj Finance regarding the loan amount.
- Consumer Court: If Bajaj Finance refuses to address the discrepancy and insists on foreclosure charges, you can consider approaching a consumer court. Ensure you have all necessary documentation and evidence to support your case.

4. Steps to Take

• Contact Bajaj Finance: Discuss the possibility of waiving or reducing foreclosure charges and clarify the loan amount discrepancy.
• Evaluate Costs: Calculate the total cost of keeping the loan versus prepaying it, including interest and foreclosure charges.
• Seek Legal Advice: If necessary, consult a legal professional to understand your options for taking Bajaj Finance to court.

Conclusion
Given the high interest rate of the Bajaj Flexi loan, prepaying it with the top-up loan at a lower interest rate seems like a financially sound decision, even with the foreclosure charges. However, negotiating with Bajaj Finance and exploring legal options can help you minimize costs.


Source
: [Economic Times] should-you-prepay-your-loan-or-invest/articleshow/71142952
: [Moneycontrol] loan-prepayment-heres-how-to-do-it-right-2456211