Banks, Financial Institutions, NBFC’s and privately owned Realty Finance companies give loans to property buyers, they factor in a long-term interest on the principle amount. In the eventuality a customer is keen on pre-paying the balance amount within the first 5 years and before the formal tenure let’s say 20 years. “The lending institution stands to incur a planned loss of ROI through interest for the next 15 years. Hence as a deterrent the institutions implemented a penalty clause for any customers who were keen to foreclose their borrowings,” Manoj Asrani Brand & Marketing Manager -Soham World said. In many cases customers obliged the institutions due to their financial stability. However due to some serious lobbying initiatives by consumer forums and activists, the lending institutions saw this as an opportunity. They terminated the penalty clauses in the hope that HNI’s and service class would actively opt for loans. This action hasn’t really fructified into large borrowings, as the current scenario suggests, there are more than 40,000 residential assets lying unsold in the price range of 1.5 to 4 crore in Mumbai.
Posted: 02 Jan 2012 04:22 AM PST
By Accommodation Times
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