What is the Axis Bank Personal Loan PreClosure Charges?

Hey everyone. Last month, I was checking out Axis Bank’s personal loan terms and came across their pre-closure charges. I found that the Axis Bank personal loan foreclosure charges vary mainly based on the loan tenure. I have shared the information related to this below.

What are the Axis Bank Personal Loan Pre Closure Charges?

Axis Bank allows borrowers to prepay or fully foreclose their personal loans before the end of the scheduled tenure. On average, it starts at 2%. However, such early repayment comes with charges based on how much time has passed since the loan was disbursed. 

• These charges are intended to compensate the bank for the interest income it would otherwise have earned over the remaining period.

• For loans where 36 EMIs or fewer have been paid (i.e., within the first 36 months), the foreclosure or part-payment charge is 3% of the principal amount outstanding. GST is extra.

• If more than 36 EMIs have been paid (i.e., after more than 36 months of the loan term), then the charge drops to 2% of the outstanding principal amount. GST is again applicable.

The foreclosure or part-payment charge is calculated on the outstanding principal. So the more you have already repaid, the lower the absolute charge will be. I hope you understand Axis Bank personal loan preclosure charges.

You might be thinking about Axis Bank personal loan foreclosure if you took out a personal loan at a time of need but are now in a solid financial situation with enough savings. According to my bank manager, if a borrower closes their loan during the first 36 months, they will have to pay a prepayment penalty of up to 3% of the principal balance owed.

What are Axis Bank Personal Loan Pre Closing Charges?

Pre-closure charges, as my bank manager explained to me, are the costs incurred by borrowers who want to terminate their personal loans before the term has expired. To put it simply, these charges are the penalties borrowers must pay back if they choose to pay back their loan completely before the agreed-upon repayment period. 

Usually, within the first few months or years of loan disbursement, Axis Bank preclosure personal loan charges are charged if the borrower decides to close the loan within the allotted time after taking it out. 

• For loans less than 36 months, you must pay GST in addition to 3% of the outstanding balance.

• For loans greater than 36 months, the cost is reduced to 2% of the outstanding amount plus GST.

My bank manager also said that pre-closure fees might be seen as a protective measure for lenders against future losses, even if they may appear like an extra cost. I hope you get an idea of Axis personal loan preclosure charges.

Axis Bank personal loan preclosure charges typically involve fees or penalties. The preclosure charges can vary based on several factors including the loan amount, tenure, and the terms and conditions specified in the loan agreement. Read on to get the exact charge percentage.

What are Axis Personal Loan Preclosure Charges?

In the case of Axis Bank, the preclosure charges for personal loans usually range from 2% to 5% of the outstanding loan amount plus applicable taxes.

This means that if a borrower decides to repay the entire outstanding loan amount before the completion of the loan tenure, they would need to pay an additional amount equivalent to 2% to 5% of the outstanding principal amount.

• It's essential for borrowers to carefully consider the financial implications of pre closure before making such a decision. While it can help save on future interest payments, the preclosure charges add to the overall cost of closing the loan early.

• Borrowers should evaluate whether the savings on interest outweigh the preclosure charges to determine if it's financially beneficial to close the loan prematurely.

• Moreover, borrowers must review the terms and conditions of their loan agreement with Axis Bank to understand the specific preclosure charges applicable to their loan.

Banks often provide details about preclosure charges in the loan agreement document or through their customer service channels. This is all about Axis Bank preclosure personal loan charges.

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