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Prepayment charges on foreclosing loan & issue thereoff

 Kiranufade on Mar 11, 2015
R Sir/madam I had taken residential land purchase loan from housing fiance bank tenure was 10 years and amount was rs 10 lakhs after regular repayment through emi for four years approximately i decided to foreclose the loan and taken new construction loan on same plot from same bank. Hence after repayment of 4 lakhs same bank foreclosed the old loan and added remaining pricipal 6 lakhs to my new requirement of loan. By charging extra prepayment charges of rs 15000 and gave me 20lakhs+6lakhs =26lakhs new home loan and added old principal in new principal and tenure is 10 years. My question is 1) should bank have charged prepayment charges as old principal is simply merged in to new pricipal 2) was it possible for bank to continue old loan along with new loan so that tenure for my old 6 lakhs loan would have been 6 years and for 20lakhs loan tenure would have been 10 years... I. E is bank is charging interest for 4 more years on 6 lakhs infact it should have charged for 10-4=6 yeras only
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