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personal loan foreclosure charges

What are personal loan foreclosure charges

Everyone has to repay their personal loan on time, based on the time period. However, personal loan applicants can also choose to repay their personal loan ahead of time. This is called personal loan foreclosure. You can do this too, by making one single payment within your loan tenure. Personal loan foreclosure comes with many advantages, but there is a small catch. You will have to pay a small fee, also known as the personal loan foreclosure charge, if you wish to close your personal loan before time.

Read this blog to know all about personal loan foreclosure charges. 

What are the benefits of personal loan foreclosure charges?

Here are some of the biggest benefits that you can get when you foreclose your personal loan and pay the additional charges levied:

You save money on your interest payments

Tired of paying interest on your personal loan? Now you can save that additional amount by paying off your personal loan early. It is even more helpful for those who have personal loans that run for a long time or a high rate of interest. 

Boosts your credit score

Want to increase your credit score? Then personal loan foreclosure is one of the best ways to do so. When you pay off all your debt, with the personal loan foreclosure charges, then your credit score will receive a bump up. Therefore, you are now better positioned to apply for further loans or credit cards

Read more: A complete guide on how to improve your credit score

Reduces your financial worries

Are you in a situation where multiple loans and their EMIs every month are making everything difficult for you? Pay the personal loan foreclosure charges, complete your personal loan foreclosure amount for at least a few of your loans and you will breathe much better. 

Thus, there are plenty of benefits when you choose to foreclose your personal loan. Choosing to repay your personal loan is a matter of your convenience. If you do have the resources to repay your loan, then you can surely go ahead with it.

Read more: What is a credit score and why is it important?

What are the fees and charges when I foreclose my personal loan?

In the case of most banks, personal loan foreclosure charges are kept around 3% to 6% of the outstanding amount + GST. Now, remember that this is not a fixed amount, and may vary depending on the bank’s discretion. In addition, it could also be a fixed amount for some banks.  

However, if you want, you can also avoid paying the personal loan foreclosure charges. While you are applying for your personal loan, go through the documents and read all the sections carefully. During this time, you can negotiate with your personal loan lender to reduce or even remove the personal loan foreclosure charges, if possible.

Read more: Now get a personal loan with a low CIBIL score!

Can I get a personal loan without any foreclosure charges?

Yes, you can always go for personal loans that do not apply any foreclosure charges. Search for personal loan lenders that do not charge foreclosure fees and you will find many of them. 

However, the absence of foreclosure charges should never be the only criteria that you look for, when applying for a personal loan. Instead, you should go through the personal loan offers of multiple banks. In addition, you could also take the help of a personal loan EMI calculator to see how the loan is affecting your monthly expenditure, interest, and more.

Therefore, in conclusion, personal loan foreclosure is a very smart move. Even more so if you have a long-term loan and a high-interest rate. Although you will have to pay the personal loan foreclosure charges, it still makes better sense as compared to paying the interest for the entire duration of your loan. 

Apply for your personal loan from Airtel Flexi Credit

Looking for a good personal loan offer? Then look no further than Airtel Flexi Credit by Airtel Finance. The whole loan application process will be 100% digital, which means that you can apply for your next loan without taking a single step out of your house. Apply on the Airtel Thanks app, provide the right information and apply for your loan!

Get instant credit approval and credit disbursal within 24 hours. With Airtel Flexi Credit, you enjoy low interest rates on your personal loan, flexible EMI options and favourable tenures, so that everyone can apply.