IDBI Bank Personal Loan Preclosure

Make a note of the below-listed points when opting for a personal loan foreclosure:

1. Check if you have completed the minimum required tenure and are eligible for personal loan pre-closure.
2. Review the applicable pre-closure charges to ensure that you don’t end up paying more.
3. You have to tell the bank your loan account number to initiate the closure process. So, keep this number in hand when you visit the bank.
4. Do request your bank for an accurate loan balance before making the payment. This will include the principal, interest, and any applicable charges.
5. The bank may ask you to pay the remaining amount through a cheque, so remember to take your chequebook along.
6. Also, carry valid ID proofs as they are also required.
7. Once the process is done, collect your acknowledgement receipt and make sure it is kept safe.

How to Pre-Close or Foreclose Your IDBI Bank Personal Loan

Follow the steps given below foreclose an IDBI bank personal loan:

1. Find a branch that's close to you, visit the branch, and find out how much you have to pay to close your account.
2. Pay the outstanding balance using the means required by the bank.
3. Complete all the other necessary formalities to terminate your account.
4. Once you get the acknowledgement of the account closure, find out how many days it will take for it be closed.
5. Follow up with the bank to make sure the account is successfully closed within the stipulated time.

What Does Pre-Closure or Prepayment of Personal Loan Mean?

Many banks allow you to close your personal loan before the end of its original tenure. This facility is known as a loan pre-closure/foreclosure facility.

When you take a personal loan, you choose a specific repayment period. If, at any point during the tenure, you have extra funds in hand, you can use them to repay the loan early. This helps you save on interest since you won’t be paying it for the remaining loan duration.

While this can be a smart financial move, some banks may charge a foreclosure fee. For example, if the fee is 5% on an outstanding loan of ₹5 lakh, you'll need to pay ₹25,000 to close the loan early.

Before you choose a personal loan foreclosure, calculate how much interest you’ll save and compare it with the foreclosure charges. Choose to close your loan early only if the savings are greater than the cost.

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