While opting for a home loan, the bank employees made me aware of the penal interest meaning. They informed me that if a borrower does not pay the loan EMI in accordance with the loan's repayment schedule, the loan provider can levy the penal rate or penal interest as a form of penalty interest.
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If the lender does not receive the loan payment by the due date, regardless of whether you pay the loan in monthly EMIs, quarterly payments, or annual payments, you will be responsible for paying penal interest home loan.
After understanding what is penal interest in home loans, I’d highlight,
How much is the penal interest rate?On an annual basis, the penal interest is typically indicated. For instance, if a lender imposes a 24% annual penal interest rate, the late sum would be subject to a 2% fine for each month of default.
Let's say, for example, that you have a loan with an EMI of Rs. 50,000 that is one month late. In the case of 24% annual penal interest, the late payment fine will be roughly Rs. 1,000 (2% of Rs. 50,000).
I’d like to conclude here about the penal interest meaning. I hope this helps:)
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What is Penal Interest in Home Loan?
Samhita
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2 Year
2023-02-23T16:53:08+00:00 2023-02-23T17:00:21+00:00Comment
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