Home News How to Close HDFC Personal Loan: Pre-Closure Rules & Charges

How to Close HDFC Personal Loan: Pre-Closure Rules & Charges


How to Close HDFC Personal Loan: Pre-Closure Rules & Charges: Being debt free is something that every individual dream of. However, when a financial crisis arises, you are left with no choice but to borrow from a third party. The safest option that you have is to Apply for Personal Loan that is easy to get and extremely easy to repay as well. 

How to Close HDFC Personal Loan: Pre-Closure Rules & Charges

HDFC Bank is one of the premier banking institutions in the country. There are several advantages of picking HDFC Personal Loan for your cash lapses:

  • You can get competitive interest rates ranging from 15.50% to 21.50%. Low rate of interest aids timely repayment of loans. 
  • Depending upon the eligibility criteria, you can avail up to Rs.40 Lakh as loan for any personal emergency. 
  • The repayment tenure is up to 60 months. 
  • You do not have to provide any collateral against the loan. 
  • Quick turnaround time and easy disbursal options make this the best choice in case of a financial emergency.
  • In the case of pre-approved candidates, the loan can become available in less than 10 minutes in principle.
  • The documentation is minimal, making it easy for you to apply for a loan and get approval.

Despite so many benefits, it is advisable to consider the prepayment when you have surplus funds in hand. You must indeed learn about the loan pre-closure rules before applying for a loan.

Is it a Good Idea to Pre-close an HDFC Personal Loan?

Generally, people apply for Personal Loans amid financial emergency. However, it is recommended to use the option to pre-close the loan when you do chance upon additional sources of income.

There are several reasons why people choose to pre-close an account or make part payments towards it, as mentioned below:

  • To reduce the number of debts against one’s name.
  • To reduce the EMI payable each month, especially if you have multiple loans and investments.
  • To improve the chances of getting other loans or investment options with HDFC. 
  • To improve the overall credit score.

Every repayment that you make towards your loan is divided into EMIs or Equated Monthly Installments that contains two portions. One is the interest that you are paying, and the other is the repayment towards the actual loan amount.

Closing your account in the initial years of the loan tenure can be extremely beneficial. It helps you save on the interest that you pay towards the loan. However, if you are towards the end of the tenure, it is a good idea to opt for either part payment or to continue paying EMIs. During this time, the savings on the interest are not very high. But, you will lose access to liquid cash when you make full payment towards the loan.

Since there are charges involved with pre-closure, it is beneficial when you do it earlier as you will have some savings.

What are the Preclosure Terms? 

With HDFC Personal Loan, there are a few loan pre-closure terms that you need to consider:

  • Prepayment or a part payment can only be made when you have made at least 12 EMI payments towards the loan successfully.
  • There are preclosure charges that you will have to pay at the time of closing your loan account.
  • In case you wish to make part payments towards the loan, you can make payments up to 25% of the outstanding loan amount in every financial year.

What are the Prepayment Charges? 

The Prepayment Charges for Personal Loan with HDFC Bank depend entirely upon when you decide to make the prepayment. The prepayment charges are as follows:

If the payment is made between 13-24 months of availing the loan: The charges are 4% of the principal amount that is outstanding.

If the payment is made between 25-36 months of availing the loan: The charges are 3% of the principal amount that is outstanding.

If the prepayment is made after 36 months of availing the loan: The charges are 2% of the principal amount that is outstanding. 

You do not have to pay any additional fees for the loan closure letter. 

How to Prepay the Personal Loan? 

There are a few steps that you need to follow in order to close your HDFC Bank Personal Loan. 

Documents Needed: 

Make sure you have following documents in hand before you proceed with preclosure of loan.

Identity Proof: Pan Card, Passport, Adhaar Card, or any other identity document provided by the Government.

Loan Approval Letter

Loan Account Statement

Any additional document provided by the bank during disbursal. 
A Pre-Closure Quote which includes the prepayment charges and penalties, if any. This can be availed from your loan officer. 

A Cheque or Demand Draft towards the amount payable at time of closing the account.

How to Close the Account?

Here are the simple steps to follow to close your account:

  1. Visit the bank with all the documents mentioned above. 
  2. Fill a prepayment form or submit a letter requesting a pre-closure of the Personal Loan
  3. Pay the amount due for pre-closing the account. 
  4. Sign the necessary documents as provided by the bank. 
  5. Collect the acknowledgment letter of the amount that you have paid to close the loan.

Once all the documents are provided, and the bank receives the funds, the account will be closed automatically. There is no requirement of hypothecation or release of any assets from lien as these loans are unsecured. You will also receive a loan closing document that needs to be kept safely.