It can be a smart financial decision to repay a personal loan early for saving interest costs and obtaining the independence of debt earlier. Here we will take you through the foreclosure procedure in case you have an Axis Bank personal loan and think about it. It will make this process simple to understand and follow.
Understanding personal loan foreclosure
A personal loan is considered one of the various types of unsecured loans offered for specific reasons, among them debt consolidation, home remodelling, traveling, schooling, or for medical expense purposes.
In this scenario, the premature pay-off of all your remaining loan amount dues prior to the end of the loan term is known as foreclosure. Lenders such as Axis Bank may levy a foreclosure charge although it normally reduces interest cost.
Types of personal loan closures
You have a few options when it comes to closing a personal loan:
- Regular closure: You continue making monthly EMI payments as per the pre-arranged schedule until the term of the loan is over.
- Pre-closure (foreclosure):You close the loan before time by repaying the entire amount due before the specified duration.
- Part-payment: You reduce the total loan burden and interest payments by paying lumps sums against the principal instead of closing the loan completely.
Axis Bank foreclosure charges
The lenders recover the loss of interest that they forego when a borrower pays back an early loan by adding foreclosure costs. In determining the remaining duration and parameters of the loan agreement, Axis Bank computes its charges on foreclosure. These must be confirmed before the foreclosure process commences.
Steps to foreclose your Axis Bank personal loan
If you’ve made the decision to foreclose on your personal loan from Axis Bank, do these actions:
- Find the closest lending centre: To locate the closest branch dealing with loan foreclosures, use the ‘loan centre locator’ on the official Axis Bank website.
- Make a pre-closure statement request: To find out the precise amount owed, including any relevant foreclosure fees, visit the lending centre and ask for a personal loan pre-closure statement.
- Depending on the payment modes: It is offered by the bank, settled by paying the balance loan with a cheque or in cash, or through an online transfer.
- Foreclosure request: Be sure to make a request for foreclosure with a formal letter in the loan centre after having settled the balance owed.
- Follow-up: Requests for foreclosure are usually processed by the bank within 15 days. To ensure that the closure is smooth, follow up with Axis Bank in case of delay.
Documents to collect after personal loan foreclosure
Once Axis Bank has closed the loan and considers it successful, their records will be updated with changes. And all original documents will be returned. Be sure to collect the following:
In conclusion, one of the excellent measures to reduce the financial burden and pay less in interest is to close the personal loan from Axis Bank. Nonetheless, analyse the foreclosure charges and check if prepayment can be afforded before making any decision. You could consider a part payment instead of a full foreclosure if pre-closure charges are attracted.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
