Published Apr 29, 2026 4 Min Read

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What are loan foreclosure charges


Loan foreclosure charges are fees applied when a loan is repaid in full before the end of its scheduled tenure. For Bajaj Finance loans, these charges are calculated as a percentage of the outstanding principal amount. You can check further details on the fees and charges page. 


Basis for foreclosure charges


Foreclosure charges are applied to account for administrative processing and the financial structure of early loan closure. These charges support operational requirements associated with closing a loan account before maturity.

Foreclosure charges structure at Bajaj Finance


Your foreclosure charges vary depending on various factors such as your type of loan, time of disbursement, rate of interest, etc. To know the structure of foreclosure charges on your Bajaj Finance loan, please visit the Fees and Charges page.


Applicability of foreclosure charges

Foreclosure charges apply only when a borrower chooses to repay the full outstanding loan amount before the scheduled end of the loan tenure.


 

Loan closure process - Overview

The loan closure process involves completing all outstanding financial obligations and fulfilling documentation requirements as outlined in the loan agreement. Borrowers are advised to ensure that all scheduled instalments, applicable charges, and documentation are completed prior to initiating foreclosure.
 

Bajaj Finance provides digital and assisted channels to support borrowers throughout the loan closure process.

Steps to foreclose your loan


  • Login to the service portal on the Bajaj Finserv app or website
  • In the ‘Your Relation ‘ section, select the loan account which you wish to foreclose
  • Click on ‘View Detail'
  • You will see the ‘make payment’ Option, click on the same
  • You will see different payment options. Click on ‘Full Payment/ Foreclosure'
  • Here you will be able to see the entire foreclosure amount you need to pay in order to close the loan, and you can download the foreclosure letter. 
  • Select the reason for Foreclosure and proceed further. 

Frequently Asked Questions

Are foreclosure charges mandatory?

Foreclosure charges are not always mandatory. Their applicability depends on the lender’s policy, the type of loan, and regulatory guidelines. For example, as per directions issued by the Reserve Bank of India, floating-rate retail loans to individuals generally do not attract foreclosure charges. Borrowers should refer to their loan agreement for exact terms. Whereas all loans with interest type fixed has these charges.

How are foreclosure charges calculated?

Foreclosure charges are typically calculated as a percentage either of the outstanding principal amount or on total withdrawable limit at the time of closure. For example, as per directions issued by the Reserve Bank of India, floating-rate retail loans to individuals generally do not attract foreclosure charges. Borrowers should refer to their loan agreement for exact terms.

Is part-prepayment the same as foreclosure?

No, part-prepayment and foreclosure are different. Part-prepayment involves paying a portion of the outstanding principal while continuing the loan, which may reduce EMI or tenure. Foreclosure means repaying the entire outstanding amount and closing the loan account permanently before the scheduled tenure ends.

Where/how to check if my loan has foreclosure charges?

You can check for foreclosure charges in your loan agreement, sanction letter, or key fact statement provided at the time of disbursal. Many lenders also publish applicable charges on their official website or customer portal. Customer service channels can provide clarification on specific loan terms.

Are foreclosure charges levied on MSME loans?

According to RBI guidelines, MSME loans booked with a floating rate of interest do not attract foreclosure charges. 
However, if a loan is booked with a fixed rate of interest, foreclosure charges will be applicable as per the specific terms of the loan agreement.

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