Personal Loan Foreclosure / Preclosure
Close your personal loan early — charges at each bank, when it pays, the process and what documents to collect.
Updated 27 September 2026 · 8 lenders trackedWhat you need to know
Foreclosure means repaying the whole outstanding loan before the tenure ends. On fixed-rate personal loans — most of the market — banks may charge a fee: from zero at IDFC FIRST to 5% + GST at Axis Bank and Kotak. RBI’s ban on foreclosure charges covers floating-rate loans to individuals, such as Bank of Baroda’s floating option.
Charges by lender
| Lender | Foreclosure charge |
|---|---|
| HDFC Bank | 4% up to 24 EMIs; 3% for 25 – 36 EMIs; 2% after 36 EMIs |
| ICICI Bank | 3% up to 24 months; nil after 24 EMIs |
| Axis Bank | 5% + GST |
| Kotak | 5% of outstanding principal + GST |
| YES Bank | Up to 4% of outstanding principal |
| IDFC FIRST Bank | Zero |
| Bank of Baroda | Zero (ClearTax); none on floating option under RBI rules |
| SBI | RTXC page lists none; aggregators report 3% on fixed-rate Xpress Credit |
Does foreclosure pay?
| When you close | Principal outstanding | Interest saved | Net saving @ 2% charge | @ 4% charge | @ 5% charge |
|---|---|---|---|---|---|
| 12 EMIs paid | ₹4,20,623 | ₹1,01,196 | ₹91,269 | ₹81,342 | ₹76,379 |
| 24 EMIs paid | ₹3,32,060 | ₹59,304 | ₹51,467 | ₹43,631 | ₹39,712 |
| 36 EMIs paid | ₹2,33,249 | ₹27,661 | ₹22,156 | ₹16,651 | ₹13,899 |
| 48 EMIs paid | ₹1,23,003 | ₹7,452 | ₹4,549 | ₹1,646 | ₹194 |
₹5,00,000 at 11.00% for 5 years (EMI ₹10,871). Charges include 18% GST. Foreclosing early saves the most; near the end, the charge can wipe out most of the saving.
Process and documents
- Request a foreclosure statementVia app, net banking or branch; it shows principal, interest to date and charges.
- PayFrom your own funds or a new lender — RBI does not allow restrictions on the source of funds for floating-rate loans.
- Collect closure letter / NOCAlso ensure any NACH mandate is cancelled.
- Check your credit reportThe account should show “closed” within a few weeks (bureaus update fortnightly).
Foreclosure calculator
Frequently asked questions
Is GST charged on the foreclosure fee?
Yes, 18% GST applies on foreclosure charges.
Can the bank refuse foreclosure?
Lenders generally allow it, sometimes only after a minimum number of EMIs, as set out in your agreement and KFS.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.