Now as per RBI guidelines, big banks like SBI, ICICI bank have withdrawn the prepayment penalty charges. The rate of interest of ICICI bank is somewhat highest as compared to other banks/housing finance companies. NHB also directed all non-bank housing finance companies not to charge any prepayment penalty charges. So now it is right time for home loan takers to look for ways to seek cheapest housing finance companies/banks in order to gain differential interest on interest on house loan. This is applicable only to floating rate and not fixed rate. This will raise competition and big banks may reduce their interest rates in order to keep the flock not going out of their rein as customers are important and to get one customer is a herculian task for banks.
C.R. Venkata Ramani