What does a reset clause in a home loan agreement indicate?


#1

What does a reset clause in a home loan agreement indicate?


#2

If you have taken a loan on fixed rate of interest and think your interest rate will be fixed for the entire loan duration, you may be in for a surprise. As per the reset clause applicable of fixed rate of interest, the banks reset the fixed rate of interest after a fixed period. Usually the rate of interest is reset after every 2 to 5 years depending on your lending bank.


#3

If I take a loan against stocks and prepay my loan are there any prepayment charges involved?


#4

Hi Vichu,

If you have taken a loan on fixed rate of interest and think your interest rate will be fixed for the entire loan duration, you may be in for a surprise. As per the reset clause applicable of fixed rate of interest, the banks reset the fixed rate of interest after a fixed period and it becomes floating rate. Usually the fixed rate of interest is reset after 2 to 5 years of taking the loan depending on your lending bank.

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