Pre-Closure and Prepayment Charges for ICICI, HDFC & SBI Personal Loan

A Personal Loan is a credit, which is granted for personal use, such as medical emergency, education, vacation, house extension, house repair, and purchase of electronic items like air conditioner, computer, and refrigerator, etc. There are several ways to Get a Personal Loan, including applying through the lender’s website or mobile app, visiting the nearest bank branch, through financial aggregators like MyMoneyMantra, and so on.

Some of the most important aspects of personal loan you must know about are Personal Loan Interest Rate, service charges, repayment flexibility, prepayment penalty, etc. The clause for prepayment or 

 something you must be aware of before taking up the loan. It will help you know about the additional liability if any that will fall on your shoulders in case you decide to repay your loan before time.

Here are the prepayment charges of three top banks:

Personal Loan Preclosure

Preclosure of a personal loan is repaying the remaining loan amount in full in one distinct payment instead of repaying the EMIs (the sum of the principal and interest components) over the specified tenure of the loan. In simple words, it is paying off your outstanding loan amount in full before the end of the tenure.

Let’s take a quick run-down on Personal Loan Pre-closure, including its procedure, charges, and other significant details. To elucidate the same, we will take examples of some of the top Personal Loan providers, i.e. HDFC, SBI, and ICICI.

HDFC Personal Loan Prepayment

If you have some surplus funds available, you can certainly plan to prepay your HDFC Personal Loan, subject to meeting the minimum lock-in period and paying HDFC personal loan pre closure charges. There is a cap of paying out 12 EMIs before applying for a loan closure. After paying off the first 12 EMIs, you can close the entire loan in a single payment.

HDFC bank applies prepayment charges based on the duration of the repayment tenure.

• HDFC personal loan closing charges are 4% on the remaining principal amount if you opt for preclosure within 13 to 24 months post disbursal.
• A preclosure initiated within 25 to 36 months attracts a pre-closure charge of 3% on the outstanding principal amount.
• For prepayment initiated after 36 months of the loan, 2% on outstanding principal amount is levied.
• No prepayment, in part or full, is allowed until repayment of 12 EMIs.
• HDFC personal loan prepayment charges may be different for salaried and self-employed borrowers.

SBI Personal Loan Prepayment

SBI Bank is the largest lender of Personal Loans in India. The giant network of SBI Bank branches is sprawled all across India, and this is perhaps one of the key reasons why SBI has a robust reach to a wide base of customers. The SBI bank provides world class customer service and fast Personal Loan processing.

The bank also extends the ease of pre-closing Personal Loans. You get a lot of flexibility, to prepay your loan as a whole principal amount or to go about the same in parts. Borrowers can easily make preclosure at any point of time during the tenure of the loan.

• If you are planning to make a preclosure of SBI Personal Loan in part or full, you will be charged 3% on the amount prepaid as SBI personal loan prepayment charges.
• If you are planning to prepay/foreclose your personal loan account from the proceeds of a new personal loan under the same scheme, no SBI personal loan preclosure charges are levied.

ICICI Bank Personal Loan Preclosure

Being one of the leading private sector banks in the country, ICICI Bank extends great ease of borrowing and repayment to the borrowers. The bank allows its customers to make swift preclosure of Personal Loan after making a single successful EMI payment.

• If a salaried customer wants to make a preclosure of ICICI Personal Loan, they need to pay 3% of the remaining principal amount plus applicable GST as preclosure charges.
• There are nil ICICI personal loan preclosure charges, if loan is closed using own funds by MSME classified customers.

Procedure for Pre-Closing a Personal Loan

• Visit the nearest bank branch of the lender from where your personal loan has been issued.
• The bank will assess your details and share exactly how much is outstanding, along with applicable charges.
• Submit the required documents detailing all the payments made so far and also showing your last payment transaction, and a Cheque to pay off the remaining loan amount.
• Submit a Cheque or Demand draft for the requisite amount.
• After the payment, the bank will provide an acknowledgment receipt for the amount received for the closure of the loan.
• The bank will mail you ‘no dues certificate’ and ‘loan clearance’ document within a few days.
• Keep these documents safely for any future reference or dispute.