Pre-payment penalty for Axis Bank home loans removed

Axis respects customers' right of choice even when they shift a loan to a competing bank.

Following the move by Axis Bank, other major banks such as State Bank of India (SBI), HDFC and ICICI Bank may also initiate the same benefit to their customers, reports Financial Chronicle. Yet, Axis Bank is the only bank that does not charge any pre-payment penalty from home loan customers either for part pre-payment or full pre-payment.

"At Axis Bank, we believe customers have the right to exercise their choice to shift if they find a rate advantage," said Manju Srivatsa, President of Retail banking at Axis Bank, as reported in Silicon India.

Currently, SBI and Punjab National Bank have no pre-payment charges if the customer prepays from own resources or if half of the loan is repaid. However, if the pre-payment is to be refinanced by any other institution or bank, the customer has to pay 2 percent penalty on the amount paid.

Many lenders have imposed pre-payment penalties when any of their customers seeks to refinance a home loan through fresh loans at lower rates.