Prepayment of a home loan could be a smart choice. If you have an existing HDFC home loan account, this article brings about a quick guide on the HDFC home loan closure process and charges. The bank does not levy any prepayment charges on floating interest loans; foreclosure of your loan can save substantially on the interest cost.
Compare Best Home Loan Interest Rates Starting @7.10% from multiple Banks and NBFCs.
| Top Banks | Interest Rates |
| SBI | 7.25% |
| HDFC | 7.75% to 13.20% |
| Kotak | 7.60% |
| HSBC | 7.45% |
| Bajaj | 7.25% - 20.00% |
Below are the HDFC home loan prepayment rules:
Firstly, you must check the current HDFC home loan interest rate. To close your HDFC home loan account immediately, you will have to visit the nearest HDFC Bank branch with your loan account number and a cheque/demand draft for the outstanding balance, because full prepayment often requires in-person submission of a home loan pre-closure request. Make sure you get a NOC (No Objection Certificate) after you make a prepayment.
Pre-closure of a Home Loan can be done in multiple ways; you can pay in part or the entire amount in one shot. It all depends on how much funding you have in hand.
Some of the factors to consider before starting the prepayment include:
Using the customer portal, you can conveniently prepay HDFC Home Loan Online.
| Bank | Interest Rates | Processing fees | EMI Per Lakh |
| HDFC Home Loan | 7.75% to 13.20% | Up to 1.50% | Rs. 716 |
The options are:
You can partly prepay your loan at regular intervals or as per the funds availability. By prepaying the amount over and above your EMI, you will reduce the principal amount and thus save on the interest cost of the loan.
Once you make a prepayment or part payment, you can choose either of the following options for your future EMIs:
i. You can reduce your monthly EMI amount and keep the tenure of the loan the same as earlier.
ii. Or, without altering the EMI amount, reduce the loan tenure.
Loan Foreclosure is when you decide to pay the entire remaining outstanding loan amount to the bank in one shot and get rid of your Home Loan and its interest completely. There could be some prepayment charges involved. The charges vary from bank to bank.
Another effortless way to prepay your home loan is to pay out more than the EMI amount per month from the actual one. This is one of the most common ways to prepay a home loan. Over the years, your monthly income appreciates with time. You can leverage the additional income to repay the higher Loan EMI. You can also contact your bank and change the EMI amount.
For individual borrowers, there is no prepayment or foreclosure charge if they opt for HDFC home loan prepayment or foreclosure.
For other than individual borrowers (where a company, sole proprietorship firm/concern, or HUF acts as a co-applicant), the following will apply.
In case of balance transfer/ refinancing,- 2% amount being prepaid + applicable taxes, statutory levies & charges. (for individual borrowers)
For other than individual borrowers (where a company, sole proprietorship firm/concern, or HUF acts as a co-applicant):
Once you are ready for the foreclosure, make a list of all documents that you had submitted to the bank during the loan application. This helps them to retrieve all details from their records once the loan is paid off.
A tentative list of documents would include:
You will also need to submit your ID proofs and loan statement, along with a letter requesting the closure of the loan
The bank will then calculate the entire outstanding amount along with the interest and penalties, if any.
Calculate Your EMI Using HDFC Home Loan EMI Calculator as per Latest Rate
Next, submit the amount using a cheque or a Demand Draft.
Once that entire amount is paid off to the bank, the bank will issue an acknowledgement letter to you stating the same.
The NOC (No Objection Certificate) and the No Dues certificate will follow in some time, as it will take a couple of days for the bank to provide the papers to you.
Once the loan is closed, the bank will then hand over all your original property papers to you, stating that you are now the official owner of that property and it is free from amortisation.
Do not forget to check the update on your CIBIL records. It will take at least 40 days to show up in your report.
Also, make sure you safely keep the bank documents as proof of payment of the loan. The same can help you in case of any dispute on a later date
You can also use Loan Prepayment Calculator to find out how much you will save on interest and how it affects your Loan EMI.
To preclose the home loan account, you are required to visit the nearest bank branch. However, you should check the home loan account balance online prior to visiting the bank. Make the entire payment with the help of a cheque. In case of refinancing, the new lender will pay the balance amount before taking over the loan. Do collect original documents & NOC after closing the home loan account.
When you prepay your home loan, the linked insurance for your home is reduced too. Thus, on complete closure of the insurance matures. The premium is not refundable.
Yes, you are required to insure the property against fire & other hazards during the loan term. The lender is made the beneficiary of such insurance policy. The cover can be availed along the loan or from a third Party.
Yes, you can close the HDFC home loan account before the loan tenure. There is no prepayment charge for floating home loans.
Opt for prepayment if you have surplus funds and your loan is relatively new. You will save a maximum of interest on new loans.
No, there is no minimum tenure for preclosure, but charges may apply depending on the loan type and agreement.
No, pre-closing your HDFC home loan positively impacts your credit score as it reflects responsible debt management.
Yes, you can close your HDFC home loan online; however, it is typically a hybrid process involving making an online service request to generate a payoff amount and digital payment, then visiting a branch to collect original documents. Complete pre-closure of the loan usually requires a formal, self-attested written request (through email/ at a branch) rather than a simple online click, often requiring all co-borrowers' consent.
For all Fixed Rate Loans (FRHL) and CRHL (during the period of applicability of the fixed interest rate) sanctioned with or without co-applicants, the prepayment charge will be levied at the rate of 2% + applicable taxes/statutory levies (if prepaid within 6 months) on the amounts being so prepaid on account of part/ full prepayments except when part/ full prepayment is being made through own sources.
3% foreclosure charge is a charge levied by a lender on the outstanding amount of the loan when a borrower opts for prepayment. However, HDFC only charges a pre-closure penalty of up to 2% of the outstanding loan amount + applicable taxes/statutory levies.
To close your HDFC home loan account, you will have to visit the nearest HDFC Bank branch with your loan account number and a cheque/demand draft for the outstanding balance, because full prepayment often requires in-person submission of a home loan pre-closure request. Make sure you get a NOC (No Objection Certificate) after you make a prepayment.
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
Director- MyMoneyMantra FinTech| A senior retail and commercial banking professional, adept at handling Business Development, Sales Planning & Growth, Product Strategy, Marketing Operations and Client advisory services phygitally.
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