Force majeure clause for fixed-rate loans: The real estate credit contracts of many leading banks may include a clause allowing banks to change fixed interest rates in exceptional circumstances, such as sharp fluctuations in market rates and changes in the bank`s internal policies. The typical clause is this: beware: this clause removes the essence of any fixed-rate credit. It does not contain a clear definition of changes in internal policies or extraordinary changes in money market conditions. Force majeure clauses should deal with major disaster situations; a definition that has been distorted by banks to protect their liability. As a customer, you have the right to negotiate with your lender to remove the clause and protect your financial liability, especially if you pay a higher interest rate for your fixed-rate loans. Warning: although most of these clauses lead the bank to protect the burden of the property, it is urgent that the borrower understand the broader definition of default and exercise due diligence to satisfy these conditions in order to avoid being considered a late payment. If, as a borrower, you are not satisfied with any of the above clauses, you can discuss and negotiate in time with the bank the necessary changes before signing the contract in order to avoid any unexpected turbulence in the future. Definition of customer failure: An intuitive definition of a buyer`s default on a home loan may relate to his or her inability to pay his IME without notice. As simple as the definition may seem, the loan agreement may, in fact, indicate several other reasons that may amount to a customer`s default and give the lender the right to immediately terminate the loan. Warning: Check carefully the advance fees included in the credit plan and make sure they correspond to market practice as well as what has been communicated to you orally by the Seller.

These fees would deter your refinancing of this loan with another lender if your existing bank charged you higher fees than market rates or raised interest rates beyond the market movement. Warning: this clause takes the essential benchmarking of a credit and clearly opposes the diktat of the RBI.