How to Close Your Home Loan Early

Closing your home loan early means repaying the outstanding amount before the scheduled tenure ends. Before proceeding, check your loan type, interest rate, source of funds and applicable foreclosure conditions.

• Individual borrowers with floating-rate home loans have no foreclosure charges under Bajaj Finance’s published fee schedule.
• For fixed-rate Term Loans, the published foreclosure charge is 4% of the principal outstanding, plus applicable GST. Exemptions apply to home loans closed using your own funds.
• Confirm the outstanding principal, accrued interest, pending EMIs, and other dues on the Bajaj Finance My Account portal or app.
• Pay the confirmed amount through an authorised channel and retain the transaction receipt.
• Obtain the applicable closure confirmation and original property documents held by the lender.

The final amount and closure requirements depend on your loan agreement and account. Confirm these details before paying, then verify that the loan and related security are recorded as closed.

Closing your home loan early means repaying the full outstanding amount before the agreed repayment tenure ends. This process is called foreclosure or full prepayment. Unlike part-prepayment, which reduces only a portion of the outstanding balance, foreclosure closes the loan after the required payment and formalities are completed. You may consider early closure to reduce future interest costs and remove the scheduled EMI commitment. However, the financial benefit depends on your outstanding principal, remaining tenure, interest rate, and applicable charges. The amount required for closure can also include interest accrued up to the relevant payment date and any unpaid dues. Bajaj Finance offers home loans with different loan structures and interest-rate arrangements. The applicable foreclosure conditions depend on your loan type and terms. Review your latest loan statement and request the official foreclosure amount before arranging the payment. Do not rely only on the principal balance shown in an older statement.

What charges apply when you close your home loan early?

Foreclosure charges are fees that may apply when you repay your outstanding home loan before the end of its tenure. These charges depend on factors such as the loan type, interest rate, borrower category, and source of funds. Some loans may qualify for exemptions under the applicable terms and conditions.

The published fee schedule defines own funds as funds from a source other than borrowing from a bank, non-banking financial company (NBFC), housing finance company (HFC), or financial institution. For dual-rate loans, the applicable charge depends on whether the loan is fixed-rate or floating-rate on the foreclosure date.

Example: Suppose you have a fixed-rate Term Loan with principal outstanding of Rs. 10,00,000, and the 4% foreclosure charge applies to your account.

• Principal outstanding: Rs. 10,00,000
• Foreclosure charge: Rs. 10,00,000 × 4% = Rs. 40,000
• Applicable GST: payable in addition to the charge
• Total before GST and other outstanding dues: Rs. 10,40,000

This example applies only where the stated charge is applicable. It does not account for any exemption, accrued interest or other dues. Ask Bajaj Finance for the final amount payable on your intended closure date.

You can close your home loan by obtaining a foreclosure statement, paying the confirmed amount, and completing the lender’s closure formalities. Follow these steps to keep the transaction documented.

1. Review your loan account. Check the outstanding principal, scheduled EMI, pending instalments and any other dues.
2. Request the foreclosure statement. Contact Bajaj Finance through an authorised service channel and ask for the total amount required to close the loan.
3. Confirm the applicable charges. Check your loan type, interest-rate arrangement, source of funds, and any applicable foreclosure charge or exemption.
4. Check the payment validity. Confirm the amount and the date up to which the foreclosure statement remains valid. Ask whether the amount needs to be recalculated if payment is delayed.
5. Arrange the funds. Ensure you can pay the confirmed amount without compromising essential expenses or other financial commitments.
6. Make the final payment. Use the authorised payment method and retain the transaction receipt or reference number.
7. Confirm closure. Contact Bajaj Finance to verify that the payment has been received, the account is closed, and no dues remain.
8. Complete the remaining formalities. Collect the applicable closure documents and any original property documents the lender holds.

The available service options and documentation requirements can vary by account. If you cannot find the foreclosure facility through the Bajaj Finance My Account portal or app, contact official support for the correct procedure. Do not assume that a regular EMI payment or part-prepayment will close the loan.

Which documents should you collect after home loan closure?

After full repayment, collect the documents applicable to your loan and confirm the status of any property-related security. The documents held by the lender can differ depending on your loan arrangement.

• Loan closure confirmation or No Objection Certificate (NOC): Retain the applicable document confirming closure of the loan.
• Final Statement of Account: Check the final balance and retain the statement for your records.
• Final payment receipt: Keep the receipt and transaction reference for the foreclosure payment.
• Original property documents: Collect the original documents held by the lender, where applicable.
• Security release or charge-release records: Ask about the relevant confirmation and any further formalities required to release the lender’s security interest.

Check the names, property details, loan account information and other entries on the documents you receive. If any original document or closure record is pending, ask Bajaj Finance what remains outstanding and how to complete the collection process.

After making the final payment, verify that your loan account is closed and that the related documentation and security-release formalities are complete. A payment receipt alone does not confirm that every closure step has been completed.

Use this checklist:

• Confirm that your loan account status shows closed.
• Check that the outstanding balance and applicable dues have been cleared.
• Retain the final payment receipt, closure confirmation and final Statement of Account.
• Collect the original property documents held by the lender, where applicable.
• Confirm the status of any loan-related security and complete any remaining formalities.
• Check whether any repayment mandate needs to be cancelled or deactivated through the authorised process.
• Review your credit report after the relevant reporting cycle to check whether the account status has been updated.

If your account still shows an outstanding balance, contact Bajaj Finance with your payment reference and request clarification. If your credit report continues to show incorrect information after the lender has confirmed closure, raise the issue with the lender and, where needed, the relevant credit bureau.

Should you close your home loan early or continue paying EMIs?

Early closure can reduce future interest costs, but it may not be the right choice if it leaves you without enough savings for essential expenses. Compare the expected interest savings with applicable foreclosure charges and your other financial priorities before deciding.

Consider this borrower example: A 42-year-old homeowner in Jaipur earns Rs. 1,50,000 per month and has a CIBIL score of 780 out of 900. These details are hypothetical and do not establish eligibility or represent an actual borrower.

Before using available savings to close the loan, the homeowner should request the foreclosure amount, check the applicable charges, and estimate the interest that could be avoided by repaying early. The homeowner should also retain sufficient funds for essential expenses and unexpected costs. The CIBIL score does not determine the foreclosure charge by itself.

Compare these factors before deciding:

• Close early: Consider this if the available funds cover the foreclosure amount and leave sufficient money for other commitments.
• Continue scheduled EMIs: Consider this if full repayment would substantially reduce your accessible savings or conflict with higher-priority expenses.
• Make a partial repayment: If permitted under your loan terms, compare the applicable part-prepayment conditions and ask how the payment would affect your balance and repayment schedule.

Use your actual loan statement and the lender’s confirmed figures to make the comparison. Do not assume that foreclosure automatically improves your credit score or that the same charge applies to every home loan.