What is Pre Closure Charges for Personal Loan in HDFC?

Pre-closure charges for an HDFC Bank personal loan refer to the penalty or fee that the bank charges when a borrower repays the entire outstanding loan amount before the scheduled tenure ends. These charges are calculated as a percentage of the principal outstanding amount at the time you close the loan, and GST and other applicable taxes are charged extra. 

How Much is Pre Closure Charges for Personal Loan in HDFC?

1. According to the official schedule of charges released by HDFC Bank, the pre-closure fee depends on how many EMIs you have already paid. If the loan is closed within the first 12 months, pre-closure is generally not allowed. 

2. After that period, if the borrower closes the loan after paying up to 24 EMIs, the bank charges 4% of the principal outstanding plus GST. If the loan is closed after 24 EMIs but before completing 36 EMIs, the charge reduces to 3% of the principal outstanding plus GST. 

3. If the borrower closes the loan after paying more than 36 EMIs, the pre-closure fee further reduces to 2% of the principal outstanding plus GST. These charges are applied on the remaining principal balance and not on the total loan amount.

4. In addition, HDFC also allows part-prepayment of personal loans under certain conditions. Borrowers can make a partial repayment only after servicing the first EMI, and the payment cannot exceed 25% of the outstanding principal at a time. 

5. Part-prepayment is allowed once per financial year and only twice during the entire loan tenure, and the same percentage charges (4%, 3%, or 2% depending on the EMI stage) apply to the amount being prepaid. 

The reason banks charge pre-closure fees is mainly to compensate for the interest income they lose when a loan is repaid early, because personal loans are structured in a way that lenders earn a significant portion of interest during the early years of repayment. 

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HDFC personal loan preclosure charges would be applied to the principal amount owed. Up to 25% of the principal amount might be paid in advance after the first EMI was serviced. It is permitted just once throughout the fiscal year and twice over the course of the loan.

What are the HDFC Personal Loan Closure Charges?

As per the HDFC Bank’s official website the charges are:

1. For up to 24 EMI, 4% of principal outstanding +GST is applicable.

2. For

   post 24-36 EMI, 3% of principal outstanding +GST is applicable.

3. For more than 36 EMI, 2% of principal outstanding +GST is applicable.

For exact charges and process details, borrowers should refer to the loan agreement or contact HDFC Bank customer care. This policy offers flexibility while maintaining transparency in personal loan repayments.

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Last year I took out a personal loan from HDFC Bank, which I closed a few weeks back. I got in touch with the bank for the process and an executive told me that I have to pay pre-closure charges. He told me that the charges that I need to pay are around 2% to 4% of the outstanding loan amount. After this, I asked about the reason for the pre closure charges for personal loan in HDFC. 

Why Are HDFC Personal Loan Pre Closure Charges Imposed?

If you want to learn about all the pre-closure charges, then you can go through the answers provided by Ashwin and Mahi. The executive also informed me that there are three reasons why the bank imposes these charges and those are.

Loss of Interest Income

One of the primary reasons why these charges are imposed is to compensate for the loss of interest rate that the bank won’t be able to collect. 

Operational Cost

He said that during the processing of a loan various operational, administrative, legal and processing charges are involved. Banks impose these charges to discourage people from frequently closing and reopening loans. 

Liquidity Management

He also told me that when loans are paid early, the cash flow projections get disrupted. Thus, they impose pre-closure costs. 

And this is all about the HDFC bank personal loan pre closure charges. I hope this will be helpful to you. 

The HDFC pre closure charges for personal loan varies based on when you choose to prepay the loan. 

What is the HDFC Personal Loan Pre Closing Charges?

Here's a general idea of how these charges are structured:

• Within 1-3 Months: Typically, no pre-closure is allowed.

• After 3 Months: A pre-closure charge ranging from 2% to 4% of the outstanding loan amount may be applicable.

• After 13-24 Months: A pre-closure charge ranging from 2% to 4% of the outstanding loan amount may still be applicable, but it could be lower than the earlier period.

• After 24 Months: A pre-closure charge ranging from 0% to 2% of the outstanding loan amount may be applicable, depending on the specific terms of the loan agreement.

These charges can vary based on the terms and conditions applicable at the time of pre-closure. It's advisable to directly check with HDFC Bank or refer to the latest loan agreement regarding pre-closure charges on personal loans.

This is all about HDFC bank personal loan preclosure charges.

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I would like to tell you the HDFC personal loan preclosure charges on the closing of a loan before its tenure. The preclosure charges for full payment up to 24 EMI repayment is 4% of the outstanding principal amount. While for the part payment, the preclosure fee after the first EMI payment and up to 24 EMI repayments is 4% of the part payment amount. I am sharing the rest of the details below to make it simple to understand.

What are the HDFC Personal Loan Early Closure Charges?

I’ll start by sharing the pre-closure charges for full payment, followed by part payment.

1. The charges are applied to the outstanding principal amount after the lock-up period. 

2. 4% of principal outstanding for up to 24 EMI repayments.

3. 3% of principal outstanding after 24 EMI and up to 36 EMI repayments. 

4. 2% of principal outstanding after 36 EMI repayments.

1. The partial pre-closure charges are applied to the part payment amount.

2. 4% of the part payment amount after the 1st EMI and up to the 24th EMI repayment.

3. 3% of the part payment amount after the 24th EMI and up to the 36th EMI repayment.

4. 2% of the part payment amount after 36 EMI repayments.

Also, I must tell you that the partial prepayment is only allowed up to an extent of 25% of the principal outstanding amount. You can do the partial prepayment only one time in a financial year and two times during the loan tenure.