How To Close Personal Loan - Regular Closure And Pre-Closure

Personal loan is growing in market because of it flexible nature. Read to know how personal loan can be close and how does it work.

30 Sep,2022 11:33 IST 170 Views
How To Close Personal Loan - Regular Closure And Pre-Closure

Personal loans are ideal owing to their flexible usage. While other loan types need security or apply usage limitations, personal loans offer relaxation in both. If you need urgent funds and have a good credit score, you may get a personal loan within 72 hours. The repayment process includes paying the principal amount with interest.

However, completing the repayment of the personal loan does not signify closure. This blog will talk about steps to close a personal loan and the ways to close it successfully with minimum hassle for a pre-closure.

Why Do You Need To Close A Personal Loan?

From applying for a loan until closure, each step is important and shapes your financial future. Your current personal repayment process determines your future ability to obtain additional loans and your credit score. Consequently, it's crucial to get proper closure on your personal loan. The following are the effects that result from not closing your personal loan appropriately:

• Outstanding debt in your name will ruin your credit score.
• It will affect the EMI value in current loans.
• You might not get loans or face problems getting loans in the future.

Prerequisites For Regular And Foreclosure Of Personal Loan

1. For General Loan Closure

To close your regular or existing personal loan, you need to submit the following to your lender:

• Personal Loan Account Number

A loan account number is an essential part of the personal loan. You can find the loan account number on your loan statement.

• Identity Proof

Identity proofs such as Permanent Account Number (PAN), Aadhaar card, voter ID, birth certificate, or government-issued or authorized cards are accepted for personal loans.

• Other Documents

A loan approval document, loan account statement, or any other loan-related document is required for personal loan closure.

Steps to close your personal loan
Step 1: Visit the lender’s branch.
Step 2: Share your loan account number at the counter to close your existing loan.
Step 3: Provide the executive with all prerequisites.
Step 4: Collect a Non-objection certificate from the bank.
Step 5: If there is a problem, get in touch with the help desk.

2. For Foreclosure

Check with your lender for the exact quote for foreclosure. In some cases, there are some charges and penalties applied.

Actions to foreclose a personal loan
Step 1: Visit the lender’s branch.
Step 2: Share your loan account number at the counter with the request to foreclose on your existing loan.
Step 3: Provide the executive with all prerequisites, such as identity proof.
Step 4: Submit the pre-closure cheque or demand draft.
Step 5: The lender will issue an acknowledgement letter of closing the loan. In some cases, the bank releases a Non-objection certificate immediately.
Step 6: If there is a problem, get in touch with the help desk.

FAQs

Q1. Is getting personal loan closure essential?
Ans. From applying for a loan closure, each step is important and shapes your financial future. Your current repayment process determines your future ability to obtain additional loans.

Q2. Do lenders apply extra charges during the foreclosure of a personal loan?
Ans. Yes. Each lender has a different set of rules and regulations for personal loans. Therefore, there could be penalties or additional fees during foreclosure.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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