Why closing a Personal Loan is crucial?

Synopsis:

  • Closing a Personal Loan ensures no outstanding debts and improves your credit score.
  • It helps reduce EMI values for future loans or investments.
  • Proper closure allows better future investment opportunities with the same lender.
  • To close a loan, you need your loan account number, identity proof, and other loan-related documents.
  • The closure process involves visiting the bank, paying the pre-closure amount, and obtaining closure documentation.


At some point, you realise you need to either pay off your pending bills or debt or need immediate cash to sponsor marriage preparations, purchase the latest gadgets or even go on a quick vacation. What do you do? You apply for a Personal Loan.

A Personal Loan, compared to others, offers more flexible options in terms of usage. Even more, it comes with various loan benefits, namely right from its quick loan disbursal, interest rates, flexible EMIs, and convenient repayment tenure. HDFC Bank, for example, offers Personal Loan EMIs at ₹2149 per lakh. Moreover, HDFC Bank customers can get their loan credited to their account in 10 seconds, and non-HDFC Bank customers within 4 hours.

No doubt, a Personal Loan will satisfy any financial requirement you have. But as you come closer to your last EMI repayment, you may have a plan of action for your future finances.

You may want to save your finances, invest in other beneficial options, or even opt for other loan options.

But before you go ahead with your financial plan, you must close your Personal Loan. Closing a loan doesn’t mean finishing off with your loan payments. You need to ensure a proper procedural closer.

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Reasons to Close Your Personal Loan

But why do you need to close your loan? Here are some of the reasons:

  • No outstanding debts against your name
  • Reduced EMI values against your name in case of current additional loan or investment options
  • Allows for better future investment or loan opportunities with the same lender
  • Improved Credit Score

Can I repay the personal loan earlier?

Yes, you can repay your loan fully any time post the cooling period; premature payment (partly) is allowed post-payment of the first EMI click here to know more.

To raise a service request regarding Personal Loan premature closure, one can raise an online token for the same. Click here to raise one.

Step guide to closing a Personal Loan

  • Step 1: Visit the bank with the complete documents (as mentioned above).
  • Step 2: You may be required to fill out a form or write a letter requesting pre-closure of the Personal Loan account.
  • Step 3: Pay the pre-closure amount.
  • Step 4: Sign the required documents, if any.
  • Step 5: Take acknowledgement of the balance amount you have paid.
  • Step 6: Since a Personal Loan is generally unsecured, no asset needs to be released from lien or hypothecation.
  • Step 7: Your Personal Loan will close automatically once the bank receives the applicable funds.
  • Step 8: The bank will dispatch a loan closing document that you must keep safe.

 

Closing a Personal Loan is as easy as applying for one. Once you finish your Personal Loan closure, you can pursue your other investment and loan options whenever you want!

Get the Personal Loan to match your needs and enjoy stress-free financial assistance now!

Documents required for a Personal Loan Closure

  • Personal Loan account number: This is usually found on the loan account statement. Or you can check it by using the online banking facility or even through your NetBanking account if available.
  • Identity proof: Carry your passport, PAN card, Aadhar card or other government-issued identity document.
  • Other loan-related documents: This includes loan approval letter, loan account statement and other documents issued by the bank.


Additional documents required for a Personal Loan pre-closure

  • Pre-closure quote: Visit the loan officer to check the loan amount balance and any pre-closure charges or penalties. Once you have the exact amount, you can pay the bank to close your loan.
  • Cheque or demand draft for pre-closure: Prepare a cheque or demand draft in favour of your bank to cover the outstanding amount. Avoid paying the pre-closure amount in cash.

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