Composite Loan

Hi, I have taken BOB composite loan (plot+home construction) and its been 4 years into the loan and i have replayed 80% of the amount taken. Now i noticed that (when i went to bank to close my acct) they have charged me additional 2L (5 months back) for not constructing home even after 3 years. Can someone please help how i can get rid of this additional amount charged?

Hi,

Most composite loans come with certain conditions. These will include a timeline for construction. Usually, banks require that you construct a home within 2-3 years of getting a composite loan. If this is not done, they start charging for your loan at interest rate that is applicable for plot loans. You must understand that plot loan interest rates can be much higher than composite loan rates. Composite loan rates are more close to Home Loan rates. We are guessing this is what happened in your case.

We suggest that you check your Home Loan contract to understand the terms and conditions of the loan. If you have signed such a contract there is nothing much that you could do. You can ask your bank to convert your loan into a composite loan if they are charging you at the rate of a site loan. You should try to figure out how that additional amount was charged before you decide to take any action.

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Cheers,
BB Expert