HDFC Personal Loan Preclosure: Things You Need to Know
If you have ever taken a loan, or are planning to procure one, you must have come across the concept of preclosure. Essentially, preclosure can be defined as the process of paying off a loan, in part or full, before the completion of the stipulated loan tenure.
Preclosure is a brilliant way to pay off your debt, and save on the interest outgo towards your equated monthly instalments (EMIs). However, there are certain aspects that need your due consideration before you use this facility, such as:
Whether or not you have sufficient funds to pay the loan before time
If you don’t have enough savings, it can prove to be detrimental to your financial health to prepay the loan. Hence, make a call only when you are completely at ease with this significantly massive payment.
Whether or not you have an emergency fund set aside
It is highly advisable that you have at least 6 months’ worth of your monthly expenses set aside as an emergency fund. If paying off the loan implies that you have to dig into this fund, then you should probably wait a while until you are at a more stable financial stage.
Whether or not your lender levies any prepayment penalty
Depending on the prepayment fee charged by your lender, you must draw an analysis of your savings on the interest, as against the expense of preclosing the loan. Only if the savings are significantly higher than the cost incurred, should you go ahead with prepaying your loan.
If, after due diligence on the above-stated aspects, you still wish to go for HDFC Personal Loan Preclosure, let us guide you with the procedure for the same.
HDFC Personal Loan Preclosure Terms and Charges
If you have taken HDFC Bank Personal Loan, on or after 1st of April 2018, you can prepay the loan, in part or full, once you have paid at least 12 EMIs.
During the tenure of the loan, you can make a maximum of two part payments, wherein the two payments should not fall within the same financial year. No part payment should exceed 25% of the outstanding principal amount.
As far as the Prepayment Penalty is concerned, it remains the same for part payments as well as full payment.
If your current tenure is greater than 13, but less than 24 Months, you must pay 4% of the principal outstanding amount.
If your current tenure is greater than 25, but less than 36 Months, you must pay 3% of the principal outstanding amount.
If your current tenure is greater than 36 Months, you must pay 2% of the principal outstanding amount.
What Do You Need for HDFC Personal Loan Preclosure?
Make sure you have the following documents handy, when going ahead to preclose your HDFC Personal Loan:
You must have your Personal Loan Account Number. If you don’t remember it, you can check your Loan Account Statement to find the same. You can also find it through net-banking or online banking facility, if you use these.
It is crucial for you to have at least 1 government issued identity proof, such as PAN Card, Aadhaar Card, Ration Card, or Driving Licence, amongst others.
It is also advisable for you to have the Approval Letter for your loan as well as your Loan Account Statement at the time of preclosing the loan.
Cheque or Demand Draft
It is recommended that you do not pay the amount for preclosure via cash. To this end, you must have a cheque or demand draft, written out in favour of your bank, complete with the outstanding loan amount as well as the prepayment penalty.
Process for HDFC Personal Loan Preclosure
You must first visit your bank branch, with the set of required documents. You will then be requested to fill the relevant form, or to write a letter stating your request for preclosure. That being done, the concerned official will convey the payable amount. You can then draw a cheque or a demand draft, and pay the amount. You may be asked to sign a few documents, which shouldn’t take much time. Next, all you need to do is take the acknowledgement of the prepayment and you will be done.
As soon as the amount is processed, the bank will close your Personal Loan account, and issue a loan closing document. You must keep this document safely.
Thanks to HDFC Bank’s increasing inclination towards offerings its customers a hassle-free experience, preclosing a loan has become exceedingly simple.
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