Loan foreclosure generally means closing a loan before the end of its original repayment tenure by paying the outstanding amount according to the applicable terms and conditions.
Foreclosure is different from regular EMI payments because the borrower chooses to close the loan earlier than scheduled. The availability of foreclosure and the charges applicable depend on the terms governing the specific loan product.
What are prepayment and foreclosure charges
Prepayment and foreclosure charges are amounts that may apply when a borrower pays the loan partly or fully before the scheduled tenure ends.
| Term | Meaning |
|---|---|
| Prepayment | Paying a part of the outstanding loan amount early |
| Foreclosure | Paying the entire outstanding amount and closing the loan |
| Charges | Depend on the loan terms and applicable regulations |
Customers should review their loan agreement for the charges applicable to their account.
Can foreclosure or prepayment charges be waived
Whether charges can be waived depends on:
- The type of loan.
- The terms of the loan agreement.
- Applicable regulations.
- Product-specific policies.
A waiver is not automatically available for every loan account. Customers should not assume that foreclosure or prepayment charges will always be reduced or removed.
How can you request a waiver of foreclosure charges
A general process may include:
- Review the applicable charges in your loan documents.
- Check the outstanding amount.
- Contact the lender through an available service channel.
- Submit any information or documents requested.
- Review the response provided.
Any decision regarding a waiver depends on the circumstances of the account and the applicable policies.
