Personal Loan Foreclosure Calculator

Foreclosure is a legal procedure where a borrower can repay the whole loan amount before the loan tenure ends. Through this method, a borrower does not have to pay the Equated Monthly Installments (EMIs) further and it also reduces the interest liability. To repay the loan amount before the tenure gets over, a borrower has to submit an application to the lender where they determine the foreclosure balance once the calculation is satisfactory, the borrower can close the loan.

Foreclosure calculator is a calculator which calculates balance loan foreclosure amount. The calculator calculates the balance loan amount as well as interest saved when a borrower pays the loan early.

Personal loan foreclosure calculator is used to calculate the balance loan amount which needs to be paid by the borrower. To calculate the balance loan amount, following inputs need to be filled:-

• Loan Amount - Loan amount can range from ₹ 5,000 to ₹ 75 Lakh.
• Loan Tenure - Loan tenure ranges between 1 months to 84 months.
• Rate of Interest - The percent principal which lender is charging from a borrower
• Number of EMIs Paid - Total number of EMIs which are paid till date.
• Foreclosure Month - Month in which a borrower would like to close the loan.
• Foreclosure Charges - If any charges are levied by a bank for foreclosure of the loan.

Foreclosure charge is the penalty which lenders levy as a prepayment penalty on early payment of personal loan. Lenders charge foreclosure charges to meet the interest loss from the early closure of the loan. However, as per the guidelines of Reserve Bank of India dated 2nd November 2017, banks and NBFCs cannot charge foreclosure charges if a lender has opted for floating interest rate and the loan is not taken for the business purpose.

The foreclosure charges levied by top banks on personal loans are:

Bank	Foreclosure Charges
SBI	3%
HDFC Bank	2 - 4%
ICICI Bank	5%
Bajaj Finserv	4%
IDFC First Bank	5% foreclosure charges. Can foreclose after 3 months in case of smart personal loan
Axis Bank	1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2%
Tata Capital	Rs. 1,000 to Rs. 5,000
Fullerton India	1 -17 months: 7%, 18 - 23 months: 5%, 24 - 35 months: 3%, After 36 months: Nil
IndusInd Bank	4%
Kotak Bank	5% foreclosure charges

Foreclosure month is a month when a borrower decides to pay off the loan in advance. The date is decided at the time of the agreement. For example, if your loan tenure is for 3 years or 36 months and you decide to pay the loan in 1 year and 6 months then the foreclosure month will be 18 months.

A personal loan foreclosure is a beneficial option and it is going to provide various benefits in the long run. Here are the advantages of paying the personal loan before time:-

• Save more money because you will have to pay less interest.
• Improve the credit score. Foreclosure or prepayment can definitely help you to improve the credit score.
• You might get a personal loan or any other loan at a better rate of interest in future. Foreclosure shows the creditworthiness of a borrower.

✅How do you calculate personal loan foreclosure?

Personal loan foreclosure is calculated by using a personal loan foreclosure calculator. In the calculator, you have to fill loan amount, interest rate, loan tenure, number of EMIs paid and foreclosure month.

✅How do you foreclose on a loan?

The procedure for foreclosure of personal loans is different from every bank but generally, you need to visit the lender's branch, submit the application form, submit the required documents and pay the foreclosure amount.

✅Is foreclosure of loan good or bad?

Foreclosure of a loan is good as you pay the loan before the tenure and it saves a lot on the interest amount.

✅What are Preclosure/foreclosure charges?

Preclosure charges are the charges which are levied by the lenders when a borrower pays the loan amount before the tenure gets over. The foreclosure charges may vary in banks.

✅Does pre-closure of loan affect CIBIL?

Yes, preclosure charges impact your CIBIL score, it has a good impact on the credit history.

✅Is there any penalty charge for foreclosing my loan?

Yes, most of the banks do charge penalty for foreclosing the loan, however, as per the RBI guidelines banks cannot charge foreclosure charges from a borrower who opts for a floating interest rate.