Are prepayment charge applicable on plot loans at floating rates?

I took a residential plot loan at floating rate from HDFC about 6 years back . I'm now doing a balance transfer to another bank , but HDFC tells me that since it is a plot loan and there has been no construction on the plot , they will charge me a prepayment share (2%).

As I understand both RBI and NHB had issued orders not to charge prepayment charges for home loans on floating rate, but HDFC tells me it is not valid for plot loans. Please help with the correct advise.

Answers (1)

316 votes

In case of ADJUSTABLE RATE HOME LOAN [ARHL] and  DUAL RATE HOME LOAN [DRHL], during the period of applicability of the variable rate of interest no prepayment charges shall be payable for partial or full prepayments irrespective of the source.

However, for Plot Loans, no prepayment charges are payable if the prepayment is made within 3 years from the date of first disbursement of the loan, but in case the prepayments is made after 3 years from the date of first disbursement the same shall bear a prepayment charge of 2% of the amounts being so prepaid if the house is not constructed. HDFC shall seek proof of completion of house construction as deemed appropriate.

As your loan tenure has exceeded 3 years (6 years as mentioned by you), the foreclosure of the same would attract applicable prepayment charges.

Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

Popular Property Lawyers

Advocate Sunil Kumar Bakshi
Sector-16, Faridabad
34 years Experience
Advocate J. P. Rinwa
Swej Farm, Sodala, Jaipur
20 years Experience
Advocate Rajesh Rai
Sector-19, Dwarka, Delhi
21 years Experience
Advocate Rajeev Nigam
Kanpur Nagar, Kanpur
27 years Experience

Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at and has been responded by one of the Property Lawyers at to address the specific facts and details. You may post your specific query based on your facts and details to get a response from one of the Lawyers at or contact a Lawyer of your choice to address your query in detail.

Related Questions

" has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."

Related Articles