Foreclosing your loan against property means paying off your loan amount before the loan’s original tenure. It can be either a partial or full payment. Doing this helps you become debt-free sooner and saves you from paying extra interest that would have added up if you continued with the regular loan schedule.
Here are two ways to foreclose your loan against property
- Full prepayment: By opting for full prepayment, you can clear the entire outstanding loan amount at once. This is suitable if you have a lump sum of money available or want to use your savings to settle the debt.
- Partial prepayment: With this option, you pay off a portion of the outstanding loan amount before the loan tenure ends. It reduces the overall loan burden and lowers your monthly EMIs accordingly.
Steps to foreclose your loan against property
- Review the foreclosure clause: Before starting the repayment process, carefully read your loan agreement or get in touch with Bajaj Finance Limited to understand the foreclosure terms and conditions. Check if there is a lock-in period during which foreclosure is not allowed.
- Arrange funds: Assess your finances to make sure you have enough money to repay the outstanding loan amount. For full prepayment, you need the total outstanding amount, and for partial prepayment, calculate the amount you want to repay.
- Inform us: Let us know about your decision to foreclose the loan. We will guide you through the process and provide the necessary documents.
- Make the payment: On the agreed date, make the payment for the outstanding loan amount using a cheque, online transfer, or demand draft, as instructed.
- Obtain No Objection Certificate (NOC): After making the payment, request an NOC. This certificate serves as proof that the loan has been fully or partially repaid and is necessary for any legal formalities or updates with the local property registrar.
- Update records: Ensure that your loan closure status is updated with credit bureaus, and also verify your CIBIL Score.
Foreclosing your loan against property is a wise financial decision that comes with several benefits, especially when loan against property interest rates are high. It not only saves you from the burden of interest but also provides a sense of financial security. Before taking this step, you can use a loan against property EMI calculator to assess your outstanding amount and savings. However, before proceeding, make sure you understand all the associated terms and conditions, such as foreclosure charges or any lock-in periods.
