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

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

A Personal Loan is a credit, which is granted for personal use such as medical emergency or family use such as education, vacation or household such as house extension, house repair, and purchase of electronic items like air conditioner, computer, and refrigerator. There are several different ways to Get a Personal Loan such as an unsecured loan, a secured loan against some of the assets like car, or with the help of a loan guarantor.

However, these are primarily unsecured loans; wherein the lender provides you the loan on the basis of your financial credentials and current financial condition. They also provide you the flexibility to use these funds as per your need and requirements.

Some of the most important aspects you must know about a Personal Loan include interest rate, service charges, repayment flexibility, prepayment penalty, etc. The clause for prepayment or pre-closure is 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.


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Closing a Personal loan before its term saves a lot on the interest component. To compensate for the interest loss, banks charge a prepayment or pre-closure penalty from the customer. Pre-closure charges vary from bank to bank.

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 some of the top Personal Loan lenders – HDFC, SBI & 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. 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, basis the duration of the loan completion.

  • The bank charges prepayment charge of 4 percent on the remaining principal amount if you opt for preclosure within 13 to 24 months of Personal Loan.

  • A preclosure initiated within 25 to 36 months, attracts a pre-closure charge of 3 percent on the outstanding principal amount.

  • While for applications initiated after 36 months of the loan, 2 percent of charges on outstanding principal amount is levied.

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 ease of preclosing 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 preclosure of SBI Personal Loan in part or full you will be charged 3 percent on the amount, which you are paying before the due date.

  • But if you are planning to close your old Personal Loan account so that you can proceed for a new loan (which you are taking under the same category of Personal Loan), you will not be charged with any of the preclosure charges against the personal loan preclosure.

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 you want to make a preclosure of Personal Loan in the first year of the loan, you are required to pay the 5% of the remaining principal amount and additional GST on the same as a pre-closure charge.

  • You can avail a waiver on the prepayment charges if you have made 12 or more monthly EMIs.

  • ICICI Bank doesn’t allow part pre-payment of Personal Loan.

Procedure for Pre-Closing a Personal Loan

  • Visit the nearest bank branch of your lender or the one from where your Personal loan has been issued.

  • Submit a set of related documents like your ID proof, PAN Card, Bank Statements detailing all the payments made and also detailing your last payment transaction and a Cheque to pay back the remaining balance amount.

  • The bank will assess your details and share exactly how much is outstanding, along with applicable charges.

  • Now 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 after a few days.

  • Keep these documents safely for any future reference or dispute.


Also Read: Important Things to Know before Pre-Closing a Personal Loan


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