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Personal Loan with Nil Prepayment

Top Banks with Nil Prepayment & Foreclosure Charges

Last Updated 21st Sep 2021

  • Top lenders allow you to prepay or foreclose your personal loan at nil charges.
  • You can apply for personal loan prepayment after the lock-in period partially or fully.
  • Top Banks offering personal loans at NIL prepayment charges are Corporation Bank , Andhra Bank, Union Bank of India and PNB.
  • ​Top Banks offering personal loans at NIL foreclosure charges are HDB Financial.
  • Ensure estimating the impact of personal loan prepayment on your EMI and finances, before prepaying your personal loan.
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What is Personal Loan with Nil Prepayment?

Personal Loan Prepayment is the facility that allows you to pay off your personal loan fully or part of it earlier than the loan tenure. If you accumulate a lump sum of money in your accounts, you can opt for Personal Loan Prepayment to pay a part of your outstanding balance. As with any financial products, most banks offer prepayment with specific personal loan prepayment and foreclosure charges. However, few banks come with nil prepayment charges.

Top Banks with Nil Part-payment Charges

Opting for part payment will significantly bring down your outstanding balances, thus lowering the Personal Loan EMI. The list of banks that offer part payment at no extra costs is mentioned in the table below.

Top BanksPersonal Loan RatesPrepayment Facility
Corporation Bank 8.90% Allowed
Andhra Bank 8.90% Allowed
Union Bank of India 8.90% Allowed
PNB 8.95% Allowed
Indian Bank 9.05% Allowed
Karur Vysya Bank 9.40% Not Allowed
Tata Capital 10.49% Allowed After 6 Months
Federal Bank 10.49% Allowed
Syndicate Bank 12.40% Allowed
Muthoot 14.00% Not Allowed

Top Banks with Nil Foreclosure Charges

Banks also allow you to close your personal loan account before the end of loan tenure by paying the entire outstanding balance in one single payment. With a personal loan foreclosure, the charges may vary based on the repayment period. For instance, Axis Finance Bank allows foreclosure with nil charges; however, if you close your account within the lock-in period of 6 months, you will have to pay a penalty of 2% on foreclosure.

Top Banks Personal Loan Rates Foreclosure Facility
HDB Financial 30.00% Allowed 6 Months

Special Conditions for Nil Prepayment Charges

Certain banks allow you to prepay your account with nil charges if you fulfil specific conditions. Some of them are mentioned below:

  • SBI Personal Loan Prepayment: If you plan to close your old Personal Loan account to avail of a new personal loan from SBI, you will not be charged with any pre closure charges against the old personal loan.
  • ICICI Bank Personal Loan Foreclosure: ICICI Bank does not provide a part payment facility; however, it offers a waiver on the foreclosure charges if you have paid 12 or more monthly EMIs.
  • Yes Bank Personal Loan Foreclosure: If you foreclose your Yes Bank personal loan after the tenure of 48 months, there will be no foreclosure charges if 25% of the principal amount is due.
  • Axis Finance Personal Loan Preclosure: You do not have to pay any charges on Axis Bank Personal Loan; however, the bank will charge you a foreclosure penalty of 2% if the foreclosure is done within the lock-in period of 6 months.

How to Apply for Prepayment with Top Banks?

To apply for prepayment with top banks, you need to follow the steps as mentioned below:

  • Visit the nearest bank branch of your lender or the one from where your personal loan has been issued.
  • Submit documents like your ID proof, PAN Card, Bank Statements, loan statements, last payment transaction and a Cheque to pay back the remaining balance amount.
  • The bank will assess your details and share the outstanding balance along with applicable charges if there are any.
  • Now submit a Cheque or Demand draft for the requisite amount.
  • After the payment, the bank will provide an acknowledgement receipt for the amount received for the closure of the loan.
  • The bank will mail you the ‘no dues certificate’ and ‘loan clearance’ document after a few days.
  • Keep these documents safely for any future reference or dispute.

However, it is advisable that before applying for a personal loan prepayment or foreclosure, you get an estimate of the prepayments’ impact on your EMI and finances. For this, you can use our Personal Loan Prepayment Calculator.

FAQs

Which bank has no prepayment charges?

Presently, the following banks have nil prepayment charges on personal loan:

  • Corporation Bank
  • Andhra Bank
  • Union Bank of India
  • PNB

Can I foreclose my personal loan account at nil charges?

Foreclosure charges vary across all banks and personal loan lenders. However, currently, the following banks allow foreclosure at nil charges:

  • HDB Financial

Are there any foreclosure charges for personal loans in SBI?

Yes, SBI charges a foreclosure penalty of 2% per annum; however, if you foreclose your loan account to avail of a new personal loan, you will not be charged any penalty on foreclosure.

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