Way out to pre-payment penalty

To lure more and more customers, the home lenders have come up with a lot of home loan schemes, offering the customers a lot of options. Apart from adding new customers, due to rising competition the lenders are taking necessary steps to discourage borrower to switch loan.

To discourage such trends the banks levy pre-payment penalty. This is the penalty that a borrower is levied with if he wants to repay the loan before the original loan duration. A lot of banks have even have hiked the amount levied as pre-payment penalty in order to minimize the loss caused to pre- payment of the loan.

The best way out of this situation is that a borrower can go for a loan scheme where there is no penalty on pre-payment or if avoiding penalty is not possible then a borrower can look for a loan with least possible penalty.