What are Foreclosure and Part Prepayment Charges on Personal Loans

What are Foreclosure and Part Prepayment Charges on Personal Loans

Foreclosure charges on personal loans apply when you repay early. Loan foreclosure reduces interest but may include fees. Understanding these charges helps you manage repayments wisely.
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What is the meaning of part-prepayment?

Part-prepayment refers to making a partial payment on a loan before the scheduled due date. This allows borrowers to reduce their outstanding balance, potentially saving on interest costs. Lenders may have specific terms and conditions regarding part-prepayments, including any associated fees or restrictions.


What are Bajaj Finance Personal Loan part prepayment charges?
 

  • There are no part-prepayment charges levied if you have opted for the Flexi Personal Loan.
  • Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment.
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What is loan foreclosure?

Loan foreclosure means repaying your entire outstanding balance in one payment before the tenure ends. In simple terms, the foreclosure meaning is closing your loan early instead of paying EMIs. This helps save on interest and become debt-free sooner.


However, lenders may levy fees for early repayment. As per pre closure charges for personal loan RBI guidelines, these foreclosure charges vary across lenders but remain regulated. Always check the lender’s terms on personal loan foreclosure charges before opting for foreclosure.


Additional read: What is personal loan NOC?


 

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What are Bajaj Finserv Personal Loan foreclosure charges?

Making part-prepayments to your loan account or foreclosing it before time, helps reduce your debt burden. If you wish to part-prepay or foreclose your Bajaj Finserv Personal Loan, you have to pay the following mentioned charges:


  • Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
  • Flexi Term Loan (Flexi Dropline): Up to 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.

Note: Foreclosure can be processed post clearance of first EMIs.
 

Access your account through the customer portal - Bajaj Finserv customer service portal to do part prepayment or make foreclosure of your personal loan.

Read here to know more about the personal loan interest rates and applicable charges.


 

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Things to consider before going for part-prepayment or foreclosure of loan

Before deciding on loan foreclosure or part-prepayment, it is essential to review the applicable terms and charges. Many lenders impose foreclosure charges on personal loan, which may reduce the overall savings from early repayment.


To maximise benefits, look for the best personal loan with no prepayment charges, as this allows you to close the loan early without additional costs. Always evaluate your financial position and repayment goals to ensure that foreclosure or part-prepayment is the right step towards becoming debt-free faster.


Benefits of personal loan foreclosure & part-prepayment

Foreclosing or partially prepaying a personal loan offers various benefits. It enables borrowers to reduce interest payments, saving money over the loan term. Early repayment provides flexibility and may shorten the loan tenure, empowering borrowers with financial freedom.


Read More: Differences between flat and reducing interest rate


In conclusion, part-prepayment on a personal loan offers borrowers the advantage of interest savings and financial flexibility. However, it's crucial for individuals to carefully examine the terms and conditions, consider prepayment charges, and assess the overall impact on their financial situation. Making informed decisions regarding part-prepayment can contribute to long-term financial well-being and debt management.


 

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 24 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of Interest per annum

10% to 31% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi variant - A fee will be deducted upfront from the loan amount (as applicable below)

  • Up to Rs. 1,999/- for loan amount less than Rs. 2,00,000
  • Up to Rs. 3,999/- for loan amount from Rs. 2,00,000 to Rs. 3,99,999
  • Up to Rs. 5,999/- for loan amount from Rs. 4,00,000 to Rs. 5,99,999
  • Up to Rs. 7,999/- for loan amount from Rs. 6,00,000 to Rs. 9,99,999
  • Up to Rs. 8,999/- for loan amount from Rs. 10,00,000 to Rs. 14,99,999
  • Up to Rs. 9,999/- for loan amount from Rs. 15,00,000 to Rs. 19,99,999
  • Up to Rs. 10,999/- for loan amount from Rs. 20,00,000 to Rs. 24,99,999
  • Up to Rs. 11,999/- for loan amount from Rs. 25,00,000 to Rs. 29,99,999
  • Up to Rs. 12,999/- for loan amount of Rs. 30,00,000 and above

*All the Flexi facility charges above are inclusive of applicable taxes

*Loan amount includes approved loan amount, insurance premium, and VAS charges.
Principal Holiday Facility Fees
  • Up to Rs.1999/- for loan amount less than Rs.2,00,000
  • Up to Rs.3999/- for loan amount from Rs. 200000 to Rs.399999
  • Up to Rs.5999/- for loan amount from Rs. 400000 to Rs.599999
  • Up to Rs.7,999/- for loan amount from Rs. 600000 to Rs.999999
  • Up to Rs.8,999/- for loan amount from Rs.10,00,000 to Rs. 1499999
  • Up to Rs. 9999/- for loan amount from Rs. 15,00,000 to Rs.19,99999
  • Up to Rs.10,999/- for loan amount from RS. 20,00,000 to RS.2499999
  • Up to Rs.11,999/- for loan amount from RS.25,00,000 to RS. 29,99999
  • Up to Rs. 12,999/- for loan amount of Rs.30,00,000 and above

Above charges are inclusive of applicable taxes & will be deducted upfront from loan amount

*(Loan amount includes approved loan amount, Insurance Premium & VAS Charges)

Bounce charges

Up to Rs. 1,200 per bounce.
“Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason

Pre-payment charges

Full pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
  • Flexi Term Loan (Flexi Dropline): Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.

Part pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part pre-payment.
  • Not Applicable for Flexi Term Loan (Flexi Dropline) and Flexi Hybrid.

*Foreclosure will be processed post clearance of first EMI

Penal charge

 Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term Loan (Flexi Dropline): Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.

Flexi Hybrid Loan: Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount during the initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable amount during subsequent tenure.

Broken period interest / Pre-monthly Instalment interest

Method of recovery of "Broken Period Interest/Pre monthly instalment Interest" would be as follows:


EMI Date : 2nd

Scenario 1: If Loan is disbursed on 1st or post 10th of the month:

For Term Loan: BPI amount will be capitalised, i.e added to Principal amount on Due date / Deducted from disbursement
For Flexi Loans: BPI amount will be capitalised, i.e added to Principal amount on Due date / Added to first instalment

Scenario 2: If Loan is disbursed between 3rd and 10th of the month:
First instalment will consist of interest for actual number of days

Note: Additional cess if any, will be applicable to all charges according to state law.

*Terms and conditions apply.

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Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.