Financial Blog

The Better Way to Pre-Close Your Personal Loan

posted on 2018-12-12 09:57:41 by Admin

Sudden cash crunch for an emergency or thinking of renovating your house? For all these kinds of emergencies, you go look up for personal loans as it is easy to access and avail which requires minimum documentation that too without any collateral. People have many queries regarding personal loans such as its interest rate, the EMI amount, service charges, etc. Also, questions like the foreclosure and the prepayment of the loan are of major concern. There are three main ways of closing your personal loan.

Part payment facility

Understanding part payment is very easy. Incase somewhere during your loan tenure you’ve got enough saving or cash from somewhere to pay off more than the EMI amount you can have that access. All you have to do is just visit the specific bank, request the part payment and once your request is, submitted and approved by the bank. then revised instructions will be given to you.

In this facility, you have the option to close your leftover amount at one shot before the loan tenure ends. But it often doesn’t help you that much, as different banks have different locking periods as well as different pre-closure charges. The charges may vary from banks to banks, and these are taken by the banks to compensate for the interest which will be lost during this facility.

For preclosing the amount you need to visit the specific bank where your loan is going on then carry all the documents including your last EMI clearance, cheque or demand draft through which you will clear the entire leftover amount. Once this is done then and the entire amount is cleared then the specific bank will provide a letter mentioning the closure of your loan amount.

In this scenario, the borrower pays off his loan for the entire loan tenure, with daily monthly EMI ’s. For this loan to get closed, make the last payment of the personal loan then contact the bank regarding the closing of the loan. Then collect all your documents like your cheque with the final payment, your identity proof, and the loan account number. Once everything is sorted then the bank will provide you a NOC or the Non-Objection Certificate, which comes as a proof that you have cleared all the amount of your loan and there is nothing pending now.

Make sure to keep this in mind, next time closing the loan or if you want to close your personal-loan now. Make sure to confirm with the bank when you are opting for the pre-closure option.