I have a small query related to loan preclosure process. I have taken a commercial vehicle loan from HDFC Bank for Rs.558094 @14.64% fixed interest rate. The EMI comes to ₹16190. We have paid 5 EMIs till date. In these 5 EMIs interest recovered by Bank is ₹32885 and principal recovered is ₹48080. I plan to approach the bank for preclosure as I am selling away the said vehicle due to inability to repay the loan and sell the vehicle at loss to a probable buyer. Now my loan outstanding principal is ₹510000. My query is that for the 45 month period, the complete interest component comes to ₹170456. And per month it comes to ₹3788. Hence for a period of 5 months it comes to ₹18940. But due to bank rules of early recovery of outstanding interest the bank has recovered ₹32885. Now if I preclose the loan after 5 months, shouldn't the bank give me back the interest difference of ₹32885 which it recovered and ₹18940 which is actual interest for the 5 month period. They also want to charge a 4% penalty for preclosing and don't want to provide refund of excess interest collected. Please help me with it.
Also when I approached the bank for preclosure purpose, I was told that only after first 6 EMIs paid that I can preclose the loan. The documents I have w.r.t loan doesn't nowhere mentions anout such condition. One document mentions abt preclosure/foreclosure charges for two conditions i.e., Closing within 1 year from first EMI and Closing after 1 year from first EMI. If six months were to be correct, it should have been " Closing after six months upto 1 year from first EMI". Also one document has a table with foreclosure conditions n charges for various types of loans. Even there it shows the charges of preclosure for within 6 months. As you can see in attached documents, the table mentions clearly for Personal loan as well as car loan, preclosure within 6 months isn't allowed. My loan document mentions at two places regarding the loan being commercial purposes.