Prepayment Penalty on commercial property loan

manpreet040

KF Rookie
Hi Team,

On home loan , we don't need to pay any penalty on prepayment of home loan .
Is this same for commercial property loan as well ?
I have a loan on floating rate of interest.
On sanction letter , it is written about penalty about 2% , if we pay above certain amount .
Can we challenge this ?

Regards,
Manpreet singh
 

Manni345

KF Mentor
Hi Team,

On home loan , we don't need to pay any penalty on prepayment of home loan .
Is this same for commercial property loan as well ?
I have a loan on floating rate of interest.
On sanction letter , it is written about penalty about 2% , if we pay above certain amount .
Can we challenge this ?

Regards,
Manpreet singh
When it comes to commercial property loans, the terms and conditions can vary from lender to lender. It's common for commercial property loans to have different rules regarding prepayment penalties compared to home loans. In your case, since your loan is on a floating rate of interest and the sanction letter mentions a penalty of 2% for paying above a certain amount, it's important to carefully review the terms and conditions mentioned in the sanction letter. These terms are typically agreed upon at the time of loan approval.

If you believe that the penalty mentioned in the sanction letter is unfair or unreasonable, you can certainly discuss it with your lender. You can express your concerns and see if they are open to reconsidering the penalty or negotiating different terms. It's always a good idea to have open communication with your lender and seek clarification on any clauses that you find confusing or disagreeable. They will be able to provide you with the most accurate information regarding the terms and conditions of your specific loan. Remember, it's important to carefully review all loan documents and consult with a financial advisor or legal professional if needed before making any decisions or challenging any terms.
 
Top