It should not be like this brother. Let me explain briefly how it works. Whenever you obtain a loan from a bank, there is ofcourse an interest rate charged on it.
When you are paying the loan back in the form of installments, the initial installments have a bigger chunk of interest and smaller chunk of the "principal" or the actual amount you took out as a loan. Example: out of Rs 40,000, maybe 15 thousand was being paid off from original loan and Rs 25,000 out of your interest.
So! after 4 years, you might not have paid off as much as you expected but it should still be less than 3.6 million.
the bank will of course charge about 10-15 percent of the "principal" as early payment penalty.
If you could post your payment schedule here, I could help you out a bit.
HIRE A LAWYER!
QUOTE=mhali;3097291]I have past experience with loan procedures, you have taken loan of 3.6 Million PKR in 2007. But you didn't realized the markup rate, usually in long term loans/mortgage markup is double the amount of total loan amount. For example you have taken 3.6 Million now multiply it by 2
3.6x2= 7.2 Million PKR
In 5 years you have paid = 2.5 Million
Remaining amount would = 4.7 Million
That's how our banking system works, you can contact a banking lawyer and sue them. You will probably get some discount over repayment. Reason is that, when you hire a lawyer you will pay 100k in fees but when HBFC hires a lawyer they will pay 500k in fees. And banks always avoid getting into legal fights.[/QUOTE]
Brother, I have to disagree with you on this due to the following!
- No bank in this world charges 100 percent interest on a loan
- No financial institution in this world expects you to pay back 100 percent of the principal and all of interest if you want to pay back early.
Do not scare the fellow Pakwheeler. He is in distress and we should help him out...