Unfair Foreclosure charges
3 weeks ago
I had purchased a car with loan (24 lakhs) on Nov 2023, car got totalled due to floods in Dec 2023. Insurance company asked bank details to disburse amount, upon informing bank I was informed that I have to pay additional 1.5 lakhs as foreclosure charges on top of outstanding amount. According to me, this is bank's duty to close the loan because the security on behalf of which loan was granted is now totalled and so they are obliged to close it and hence I must not be made to pay additionally. Am I right? What am I supposed to do here ? Kindly guide me. Thank you for your responses
A.Dear Client,
Banks typically don't charge foreclosure fees within the first 6 months of a car loan, but terms and conditions of the loan agreement vary. If an insurance payout falls short of the loan amount, foreclosure charges may apply. Comprehensive car insurance usually covers natural calamities, but add-on covers offer extra protection. To address grievances with the bank regarding a car loan, complaints can be filed online at the RBI portal or by contacting their helpline. Physical complaints can also be submitted to the Centralised Receipt and Processing Centre in Chandigarh, or emailed to [email protected].
Banks typically don't charge foreclosure fees within the first 6 months of a car loan, but terms and conditions of the loan agreement vary. If an insurance payout falls short of the loan amount, foreclosure charges may apply. Comprehensive car insurance usually covers natural calamities, but add-on covers offer extra protection. To address grievances with the bank regarding a car loan, complaints can be filed online at the RBI portal or by contacting their helpline. Physical complaints can also be submitted to the Centralised Receipt and Processing Centre in Chandigarh, or emailed to [email protected].
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A.Dear Sir,
You are correct but to solve the problem you may either approach Banking Ombudsman or a Civil Court.
You are correct but to solve the problem you may either approach Banking Ombudsman or a Civil Court.
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A.Dear Client,
Most banks do not levy foreclosure charges within 6 months from the date of availing the loan and even do not levy any extra penalty on foreclosure. So, here the terms and conditions of your loan agreement with the concerned lender matters the most. Another point may potentially impact your foreclosure of a car loan if the Insurance Company's coverage/compensation falls short of your outstanding loan, then Bank may charge foreclosure charges on the outstanding amount of loan including interest acrued therein. A car damaged by floods is a natural calamity/disaster and the scope of coverage can vary significantly based on policy terms and exclusions. A comprehensive car insurance policy provides coverage against damages or losses caused due to almost all natural disasters, which means you don't have to buy individual plans for each one of them. Even if you have insured your car with a comprehensive car insurance policy, you should also consider buying some add-on covers. These add-on insurance covers offer additional protection & coverage to your car during natural calamities. So, if are aggrieved with the action of the Band in the matter of a car loan, a complaint can be made at https://cms. rbi.org.in or by calling the helpline number 14440. The complaint may be lodged online or by filing a physical complaint and submitting the same at Centralised Receipt and Processing Centre (CRPC) at RBI, 4th Floor, Sector 17, Chandigarh, 160017. Alternatively, an email can be sent to [email protected].
Most banks do not levy foreclosure charges within 6 months from the date of availing the loan and even do not levy any extra penalty on foreclosure. So, here the terms and conditions of your loan agreement with the concerned lender matters the most. Another point may potentially impact your foreclosure of a car loan if the Insurance Company's coverage/compensation falls short of your outstanding loan, then Bank may charge foreclosure charges on the outstanding amount of loan including interest acrued therein. A car damaged by floods is a natural calamity/disaster and the scope of coverage can vary significantly based on policy terms and exclusions. A comprehensive car insurance policy provides coverage against damages or losses caused due to almost all natural disasters, which means you don't have to buy individual plans for each one of them. Even if you have insured your car with a comprehensive car insurance policy, you should also consider buying some add-on covers. These add-on insurance covers offer additional protection & coverage to your car during natural calamities. So, if are aggrieved with the action of the Band in the matter of a car loan, a complaint can be made at https://cms. rbi.org.in or by calling the helpline number 14440. The complaint may be lodged online or by filing a physical complaint and submitting the same at Centralised Receipt and Processing Centre (CRPC) at RBI, 4th Floor, Sector 17, Chandigarh, 160017. Alternatively, an email can be sent to [email protected].
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