Professional Loan Foreclosure Charges: Process And Online Guide

Foreclosing a professional loan means clearing your entire outstanding amount before the tenure ends, but the total you'll actually pay includes more than just your remaining principal, any overdue EMIs, applicable foreclosure charges, and taxes are all part of the final figure.

• A foreclosure charge percentage doesn't tell you the whole cost. Even a modest-sounding rate applies to your full outstanding principal, always calculate the actual rupee amount before deciding, not just the percentage.
   
• Overdue EMIs don't disappear when you foreclose. Any missed instalments and their charges get folded into your total foreclosure amount, you can't skip past them by closing the loan early.
   
• Closing the loan won't automatically boost your CIBIL score. It's reported as closed with zero outstanding, which is good for your credit profile, but a higher score depends on your overall repayment history, not this one action alone.
   
• Compare the charge against what you'd actually save. Foreclosure charges can eat into the interest savings you're expecting, work out both numbers before assuming early closure is the better financial move.
   

Before foreclosing, check your current foreclosure statement through My Account for the exact total, including any overdue amount and applicable charges, rather than estimating from an earlier figure, and keep your final payment receipt and closure documents once it's done.

Foreclosure charges on a professional loan are fees that may apply when a borrower repays the outstanding loan amount in full before the scheduled tenure ends. Applicable charges depend on the loan type, interest rate, repayment terms, and the lender's fee structure. For certain professional loan variants, foreclosure charges may be calculated as a percentage of the outstanding principal at the time of foreclosure. Borrowers should check their loan agreement and the applicable fees and charges to understand the amount payable before proceeding. The foreclosure amount may also include the outstanding principal, applicable interest, and other charges, where applicable. Paying the loan in full can close the account once all required dues are cleared and the lender processes the foreclosure. Borrowers should review the foreclosure statement carefully to understand the total amount required to close the loan. Checking these details before making the payment helps borrowers assess the cost of foreclosure and plan repayment accordingly.

How to foreclose your professional loan and clear overdue amount through Bajaj Finance

Foreclosing a professional loan requires clearing the outstanding loan amount, any applicable overdue amount, and foreclosure charges. Before proceeding, review the total amount payable and ensure the foreclosure request includes all required dues.

Steps to foreclose your professional loan and clear overdue amount:

1. Sign in: Log in to Bajaj Finance My Account using your registered mobile number and OTP.
2. Select your loan: Open the relevant professional loan account under Loan Details.
3. Check overdue: Review any missed EMIs, overdue amounts, and other applicable dues.
4. Make overdue payment: Select the option for missed EMIs or other overdues and complete the payment, where required.
5. Choose foreclosure: Go to the loan payment section and select the Foreclosure Payment option.
6. Review foreclosure amount: Check the outstanding principal, applicable foreclosure charges, and other dues before proceeding.
7. Complete payment: Select an available payment method and pay the total foreclosure amount.
8. Save confirmation: Retain the payment receipt and foreclosure confirmation for your records.

After all applicable dues are cleared and the foreclosure is processed, check the loan account status to confirm closure. Keep the payment and closure records for future reference.

What documents are required for professional loan foreclosure?

The documents required for professional loan foreclosure depend on the loan account and the applicable closure process.

Keep the following information available:

• Loan Account Number (LAN): Helps identify the professional loan account.
• Foreclosure statement: Provides the amount and applicable components required for full closure, where issued.
• Payment confirmation: Keep the transaction receipt after making the final payment.
• Identity details: Provide the required identification if requested during the closure process.
• Loan documents: Keep the loan agreement, repayment schedule, and relevant account statements for reference.

Additional documentation may be requested depending on the loan type and account requirements. Check the specific instructions displayed through the official service channel before submitting or making the final payment.

Professional loan foreclosure charges are generally calculated using the applicable charge rate and the amount specified as the basis for foreclosure on the relevant payment date.

A simple calculation can be expressed as:

Foreclosure charge = Applicable charge rate × Applicable amount

For example, if your applicable charge rate is 4% and the charge is calculated on an outstanding principal of Rs. 5,00,000, the charge before any applicable tax would be: Rs. 5,00,000 × 4% = Rs. 20,000

This is only a calculation method and not an indication of the charge applicable to every professional loan. The applicable percentage, calculation basis, and taxes depend on your loan terms and the prevailing fee schedule.

For a more accurate estimate, compare the following components:

Bajaj Finance states that you can check loan-specific charges by signing in to the Bajaj Finance App or Customer Portal, as well as through the loan agreement, sanction letter, and applicable fees and charges information.

What should you check before foreclosing a professional loan?

Reviewing the total cost and loan status before foreclosure helps you understand the financial effect of closing the loan early.

Consider these factors before making the final payment:

• Final settlement amount: Confirm the current amount payable rather than relying on an earlier estimate.
• Foreclosure charges: Check whether your loan attracts a foreclosure charge and the basis used for calculation.
• Interest savings: Compare the foreclosure cost with the interest you would otherwise pay over the remaining tenure.
• Available funds: Ensure that paying the foreclosure amount will not affect funds required for essential personal or professional expenses.
• Pending dues: Check whether any overdue EMI or other outstanding amount needs to be cleared before closure.
• Loan status: Confirm that the account is eligible for foreclosure under its applicable terms.
• Closure confirmation: Retain the final payment receipt and relevant closure documentation.

Foreclosure may reduce future interest payable, but the financial benefit depends on the remaining principal, remaining tenure, applicable charges, and your loan terms. Review the actual foreclosure amount before deciding.

How does professional loan foreclosure affect your loan account and CIBIL record?

A successfully foreclosed professional loan is reported as closed rather than remaining active, subject to the applicable credit reporting process. Foreclosure itself does not mean that a borrower has defaulted, and Bajaj Finance states that a foreclosed loan is reported to CIBIL as closed with zero outstanding once the foreclosure is completed. After making the final payment, verify that the payment has been credited and that the loan account reflects the appropriate closed status. Retain the foreclosure receipt and closure documents for your records. Review your credit report when the updated information is expected to appear, and raise a service request if the loan status or outstanding amount does not reflect the completed foreclosure. Closing a loan early can reduce the number of active liabilities on your credit profile, but foreclosure does not automatically increase your CIBIL score. Multiple factors influence your credit profile, including repayment history and other active credit accounts.