Loan Foreclosure Charges: Hidden Cost You Must Check First
Loan Foreclosure Charges: Hidden Cost You Must Check First
Foreclosure Charges: Know Before Paying
Foreclosure Charges: Know Before Paying
Closing your loan early may cost more than you actually expect.
Closing your loan early may cost more than you actually expect.
Foreclosure means fully repaying your outstanding loan before the scheduled end date.
Foreclosure means fully repaying your outstanding loan before the scheduled end date.
What Does Foreclosure Mean?
What Does Foreclosure Mean?
Early loan closure can attract a fee between 2% and 6% of what you still owe.
Early loan closure can attract a fee between 2% and 6% of what you still owe.
How Much Do Lenders Charge?
How Much Do Lenders Charge?
An 18% GST applies on top of the foreclosure penalty charged by the lender.
An 18% GST applies on top of the foreclosure penalty charged by the lender.
GST Adds to Your Cost
GST Adds to Your Cost
Most lenders restrict foreclosure for the first 6 to 12 months of repayment.
Most lenders restrict foreclosure for the first 6 to 12 months of repayment.
Check Your Lock-In Period
Check Your Lock-In Period
Floating-rate personal loans cannot attract foreclosure penalties under current RBI guidelines.
Floating-rate personal loans cannot attract foreclosure penalties under current RBI guidelines.
What RBI Says About This?
What RBI Says About This?
On fixed-rate loans, lenders can legally charge a penalty for early closure.
On fixed-rate loans, lenders can legally charge a penalty for early closure.
Fixed Rate Loans Are Different
Fixed Rate Loans Are Different
Closing a ₹5 lakh loan early could mean paying ₹20,000 or more as penalty.
Closing a ₹5 lakh loan early could mean paying ₹20,000 or more as penalty.
A Simple Cost Calculation
A Simple Cost Calculation
Repay after the lock-in ends or negotiate the fee with a good repayment record.
Repay after the lock-in ends or negotiate the fee with a good repayment record.
Ways to Minimize the Penalty
Ways to Minimize the Penalty
Always compare the interest saved against the penalty paid before initiating any loan foreclosure.
Always compare the interest saved against the penalty paid before initiating any loan foreclosure.
Calculate Before You Close
Calculate Before You Close
Disclaimer The information provided on this website is for general informational purposes only and should not be considered financial or legal advice. Please consult with a qualified financial advisor before making any decisions.