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How to Foreclose HDFC Personal Loan in 2022?

Updated on: 05 May 2022 // 35 min read // Personal Loans
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How to Foreclose HDFC Personal Loan in 2022? - A Step by Step Guide

There will be a time in everyone’s life when too many issues crop up and no options left. For instance, you will be hounded by pending bills, EMI obligations, wedding expenses of a beloved one or education expenses, medical emergencies, etc. You would be confused as to which one to provide for first. Personal loans can be the best solution for all these issues as you can get a consolidated amount that could resolve your confusion, and you will be able to meet all your financial requirements. The flexible option in terms of the purpose of the loan is the trump card of personal loans.

HDFC Bank provides personal loans up to Rs. 40.00 lakhs at a competitive interest that starts at 10.50% p.a. An existing customer can get the loan disbursement within 4 seconds, and other customers can get the loan amount within 10 hours. In the future, when you are in need of a big-ticket loan, the issue that could perturb you would be how to foreclose HDFC personal loan without paying heavy penalties. The solution for your issue is as discussed below.

HDFC Personal Loan Foreclosure Charges and Fees 2022

The solution to your concern as to how to pre-close HDFC personal loan with the least penalty depends at which stage of the tenure you choose to close the loan. The prevailing HDFC Personal Loan Foreclosure charges along with terms and conditions are given below:

  • Pre-closure or part prepayment can be done only after12 EMIs are paid.
  • Part prepayment of up to 25% of the principal outstanding will be allowed.
  • Part-payment can be done once in a financial year and twice during the whole tenure.

The fees will be

  • 4% of the principal outstanding for preclosure and 4% of the prepaid amount for part prepayment if the payment is made between 13 to 24 months.
  • 3% of the principal outstanding for preclosure and 4% of the prepaid amount for part prepayment if the payment is made between 25 to 36 months.
  • 2% of the principal outstanding for preclosure and 2% of the prepaid amount for part prepayment if the payment is made after 36 months.

Additional Info: Check HDFC Overdraft Facility.

How to Pre-close HDFC Personal Loan?

Availing of a personal loan is one option to meet your immediate cash requirements. But along the personal repayment tenure, there might be changes in your financial plans. You might want to make some lucrative investments involving a big-ticket loan. If you have to improve your debt to income ratio, you will need to rework your existing financial obligations. Closure of personal loans could be a part of the reworking. 

But HDFC Personal loan pre-closure does not mean paying up the outstanding principal balance along with up-to-date interest to put an end to your monthly obligation. You might wonder if there is no option to pre-close HDFC personal loan online then how to pre-close HDFC Personal Loan otherwise. You will have to do the pre-closure offline, which involves a procedure that you need to follow. 

What is necessary to apply for a pre-closure?

  • Personal loan account number. You can get your account number from the loan account statement or through HDFC net banking.
  • Identity proof like Aadhar card, passport, PAN, or Driving Licence
  • Loan-related documents like loan sanction letters, loan account statements, or any other documents issued by the Bank
  • A pre-closure letter mentioning the outstanding loan amount, penalties, and other applicable charges.
  • Cheque/draft favouring HDFC Bank for the pre-closure amount
  • HDFC Bank does not accept cash beyond Rs. 49000/- for both pre-closure as well as part prepayment of the loan.

Procedure for pre-closure

  • Visit the HDFC bank branch along with all the documents and necessary information as detailed above.
  • Place a request for pre-closure either vide a request letter or by filling a relevant form.
  • Pay the pre-closure amount.
  • Execute documents if necessary.
  • Obtain an acknowledgement from the Bank for the pre-closure amount paid.
  • Pre-closure of a personal loan does not involve the release of securities as it is an unsecured loan.
  • The loan will get closed automatically on receipt of the outstanding amount.
  • The Bank will then dispatch a NOC to your mailing address.

Now that you have found a way to solve your confusion about how to foreclose HDFC personal loan, you can easily close a personal loan and go ahead with your plans of availing of a big-ticket loan to make a lucrative investment.

Documents required for HDFC Personal Loan Pre-closure

After getting the awareness of how to pre-close HDFC personal loan, you should know about the documents that you will have to carry to make the loan closure process seamless.

You should carry the following documents when you approach the HDFC Bank branch for the pre-closure of your personal loan.

  • Statement of the Personal Loan Account.
  • Any valid photo ID proof like Aadar Card, PAN, Passport or Driving Licence.
  • A cheque/draft favouring HDFC Bank for payment of the pre-closure amount.

 When can you foreclose HDFC Bank Personal Loan?

The HDFC Bank Personal Loan can be either foreclosed or part prepaid only after payment of 12 EMIs.

What are the benefits of HDFC Bank Foreclosure or Prepayment?

The benefit you can avail of by foreclosure of HDFC Bank Personal Loan are:

  • Relief from the burden of monthly EMIs
  • The overall cost of the loan will reduce.
  • The eligibility for a big-ticket loan will increase, enabling you to make lucrative investments like investing in a property.
  • It Will help in improving the credit score.

By making part prepayments for the HDFC Bank Personal Loan, you will be

  • Saving on the interest cost if you retain the EMI and shorten the tenure.
  • Easing the EMI burden if you opt to retain the original tenure and lower the EMI.

Frequently Asked Questions 

✅ What are the terms and conditions for foreclosure and part prepayment of HDFC Bank Personal Loan?

Apart from understanding how to foreclose HDFC personal loan, you should also comply with the terms and conditions that are stipulated for permitting the foreclosure.

The following are the terms and conditions for foreclosure and part prepayment of HDFC Bank Personal Loan.

  • Foreclosure or part prepayment are permitted only after payment of 12 EMIs.
  • Part prepayment of up to 25% of the outstanding principal is permitted.
  • Part prepayment can be done only once in the financial year and twice for the entire loan tenure.

✅ What are the prerequisites for foreclosure of HDFC Bank Personal Loan?

The prerequisites for the foreclosure of HDFC Bank Personal Loan are:

  • Personal Loan Account number that can be obtained from the loan account statement or through net banking.
  • Valid Id Proof like Aadhar Card, Passport, Driving Licence or PAN.
  • The preclosure amount including penalties and other charges.
  • Documents relating to the loan like loan approval letter, loan statement and any other documents issued by the Bank.
  • Draft/cheque favouring HDFC Bank to pay the preclosure amount.

✅Can the foreclosure of HDFC Bank Personal Loan be done online?

If you are looking for an option for how to pre-close HDFC persona loan online, then there is none as HDFC bank has no provision for pre-closure of a personal loan online. You can do the preclosure only by visiting the branch personally and getting details of the outstanding loan amount along with penalties and other charges.

✅What is the procedure for foreclosure of HDFC Bank Personal Loan?

Have a look below to clear your doubt about how to foreclose HDFC Personal loan.

You will not be able to foreclose the HDFC Bank Personal Loan online. You will have to visit the branch and close the account after getting the information about the outstanding loan amount and penalties, and other charges collected by the Bank for such preclosure.

You should have the following with you when you approach the Bank for preclosure.

  • Loan account number. The loan statement will have the personal loan account number. If you do not have the loan statement, you can log in to net banking and get the required details by clicking on ‘Loans.’
  • You can also download the loan statement as it will be required for preclosure.
  • You should also carry valid photo identity proof like Aadhar Card, Voter’s Id Card, Driving Licence or PAN.
  • Also, a loan approval letter and any other loan-related documents will also be required.

For preclosure of the HDFC Bank Personal Loan, you will have to submit the above documents along with a written request or a duly filled application form.

The next step will be to pay the outstanding loan amount along with up-to-date interest and other charges either by a cheque or draft favouring HDFC Bank. The details of the preclosure amount should be obtained from the branch.

You should collect the acknowledgement for having paid the preclosure amount.

On the credit of the preclosure amount to the personal loan account, the account will be closed automatically.

A No Objection Letter will be dispatched by HDFC Bank to your mailing address available as per their records.

No security release will be involved as the personal loan is an unsecured loan.

On the closure of the personal loan account, you will be relieved of the burden of monthly repayments, and you can make other investment plans.

✅What are the benefits that I will get on foreclosure or prepayment of HDFC Personal Loan?

On foreclosure or prepayment, you will be benefited in the following ways.

  • You will be relieved of further repayments, and your debt to income ratio will improve.
  • The credit score will improve.
  • You will save on the overall cost of the loan.

If you make part prepayments to the loan account 

  • You will be saving on the interest cost.
  • You will have the option to retain the original tenure and reduce the EMI burden or retain the existing EMI and save on the overall cost by reducing the tenure.t

✅What are the fees and charges for foreclosure of HDFC Bank Personal Loan?

Foreclosure of HDFC Bank Personal Loan attracts foreclosure charges between 2% to 4% of the outstanding loan amount. The charges will be 4% if the loan is closed between 13 months to 24 months, 3% if the loan is closed between 25 months to 36 months and 4% if closed after 36 months,

The foreclosure will be permitted only after the successful payment of 12 EMIs.

✅ How does obtaining a NOC after the closure of the HDFC Bank personal loan help? 

A NOC clearly states that all the outstanding dues along with up to date interest and other charges are paid, and there are no dues outstanding for the particular loan on a certain date. The NOC should contain your name and loan account number.

NOC is a legal document that will help in case of any legal hassles or discrepancies that may arise in the future with regard to the repayment of the loan.