I have recently sold my house and closed the HDFC home loan and a top up loan associated with it. I have first closed the top UP loan on in october and later I have closed the Home loan.

HDFC Ltd have charged me 2 % penalty on both the loans mentioning that the penalty applicable as the property was sold. There was a news article in times of india dated October 20th, which says banks can't charge the pre-payment penatly against pre-closre of a home loan and there was no mention about a property sale clause. There was no mention that banks can charge the prepayment penalty when the loans are closed due to sale of property. I have emailed to HDFC Bank and they mentioned that the loan was closed before this circular was out, but I have actualy closed after this news released. I have replied with details and later did not respond to any of my emails. I will be also sending the details to Banking ombudsman as this is unfair done by the bank.

Thanks and regards

Rajesh Nair