Can I Cancel Personal Loan After Disbursement?

A month ago, my uncle made a mistake by taking a personal loan for my cousin’s marriage. Later, he asked me can we cancel personal loan after disbursement. As far as I knew, generally, it is not allowed to cancel a personal loan after disbursement. But you can cancel it under certain circumstances, which I shared below.

Can I Cancel My Personal Loan After Disbursement?

Generally, no. But, in India, you can cancel a personal loan even after disbursement, only within the specific “cooling-off” or look-back period defined by the lender’s terms. Once this window closes, cancellation is typically not allowed.

1. The correct approach starts with thoroughly reviewing your loan agreement to understand the permitted cancellation period, applicable charges, and procedural requirements.

2. If you decide to cancel during the allowed period, you must immediately contact your lender. For this, you can follow the tips I shared earlier.

3. Once repayment is made, get written confirmation from the lender. It will indicate that the loan has been formally cancelled. This documentation protects you from future liability. 

If the disbursement has already been used or the cooling-off period has lapsed, cancellation is not feasible. In such cases, your alternatives include early foreclosure, prepayment, or loan restructuring. But these methods may also involve penalties or administrative charges.

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If you applied for a personal loan without fully understanding the terms and conditions or the amount of the EMI. You later discover you cannot make the required EMI payments and plan to cancel them. Then, a query must arise in your mind is can I cancel my personal loan after disbursement? Yes, in India, cancelling a personal loan after disbursement is possible, but it\'s a complex process.

Can We Cancel Personal Loan After Disbursement?

Yes, but as I mentioned earlier, it comes with certain conditions and potential charges. Once the loan is disbursed, it’s credited to your account, and the lender considers the loan as availed. If you wish to cancel it, you need to inform the lender immediately.

• Reach out to the lender’s customer service or visit their branch to request loan cancellation. Submit a formal written request explaining the reason for cancellation.

• You must return the entire loan amount, including any interest accrued during the period it was in your possession.

• Many lenders impose a cancellation fee, which could be a fixed amount or a percentage of the loan amount. Check the terms and conditions of your loan agreement for details.

• The processing fee paid during loan approval is usually non-refundable.

Most lenders allow loan cancellation only within a stipulated period. As of my knowledge, it is 7 to 15 days from the disbursement date. Beyond this, you would need to pay for the loan.

I hope this resolves your query, can I cancel personal loan after disbursement.

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