I took a personal loan from a finance company called Prime Financial. The loan was of Rs. 27, 000 for 30 months with an EMI of Rs. 1, 477. What is the actual rate pf interest? They did not give me any documents stating loan related information. When I ask them whether the loan can be closed, they tell me about some charge called the prepayment penalty which is around Rs. 23, 000. I have already paid 14 installments. Can the bank do something like this?
October 17th, 2008 at 1:48 pm
You actual interest rate according to the information provided by you is approximately 42.5%.
Click on this link to calculate interest rate :
http://www.apnaloan.com/loan-advice-india/interest-on-rate-of-return-calculator.html
October 17th, 2008 at 2:06 pm
Prime financial is not a bank; it’s a Non banking finance company. The rules governing them are different than those which govern banks.
October 21st, 2008 at 4:21 am
I too facing the same problem i got a loan for 45,000 still now i had paid 31000 as 14 installments for closure they asking too pay still 36,000 nearly 40%, how to solve the problem weather government rules permit them to buy such a huge interest from us, plz help me.
November 18th, 2008 at 7:50 pm
so as manisha has pointed out that your actual rate is somewhere around 42%, the amount of RS 23000 which the company is asking includes the principal and the interest outstanding. There they migh have also levied some prepayment penalty. This is too expensive deal since in the market you can get personal loan in the range of 20 to 30 %
November 19th, 2008 at 2:46 pm
Your interest rate is between 40% to 42% p.a. The amount which you are saying the bank is asking for prepayment cannot be 23000 at all. Bank charges some prepayment charges which is in percentage let say 5% to 10% on your remaining balance amount.
November 19th, 2008 at 2:50 pm
Bank cannot give a round figure and ask you to pay for your prepayment of your loan amount. Bank should give you a percentage i.e is charges which they take for prepayment let say 5 to 10%.
November 19th, 2008 at 7:19 pm
Look almost all the banks charge prepayment penalty. A prepayment penalty is charged when a part or the entire loan is prepaid. It is not wrong when the banks charge this fee.
December 18th, 2008 at 2:36 pm
I think this is a lesson for anyone who is taking a loan. Please check all the charges specially prepayment charges & processing charges before taking any loan.