Personal loans are a popular financial tool for managing various expenses, from medical emergencies to home renovations. However, there are instances where borrowers might need to cancel their personal loan applications. Understanding the reasons behind such cancellations and the methods to effectively carry them out is crucial for borrowers to avoid unnecessary complications and financial penalties. This guide provides a comprehensive overview of common reasons for personal loan cancellation, explores the methods available for cancelling a loan, and outlines the documents required for each method. Whether you're using an instant loan app or dealing with customer support, this information will help you navigate the process smoothly.
Common reasons for personal loan cancellation
Personal loan cancellation occurs when a borrower decides to terminate the agreement with the lender before the loan amount is disbursed. Several factors can lead to the cancellation of a personal loan, such as:
- Improvement in financial situation: Sometimes, borrowers may experience an unexpected improvement in their financial situation, such as receiving a bonus, inheritance, or a salary hike, which negates the need for a personal loan.
- Better loan offers from other lenders: Borrowers may find better loan terms, such as lower interest rates or more favourable repayment conditions, from other financial institutions, prompting them to cancel the current loan application.
- Purpose of borrowing fulfilled through other means: The original purpose for which the loan was sought, such as medical expenses, education fees, or home renovation, may be fulfilled through other financial sources like savings, help from family and friends, or insurance claims.
- Unacceptable loan terms: Upon reviewing the loan agreement, borrowers might find certain terms and conditions, such as hidden charges or unfavourable repayment terms, to be unacceptable, leading to the decision to cancel the loan.
How to cancel a personal loan?
Methods and documents required
Instant loan apps
Instant loan apps have revolutionised the way personal loans are applied for and processed. These apps offer the convenience of applying for loans anytime and anywhere, with minimal paperwork. They also provide the option to withdraw or abort the loan application process at any stage before approval. However, once the loan is approved and the disbursement process is initiated, cancelling the loan becomes significantly challenging. Borrowers should act promptly if they wish to cancel their application through these apps.
Customer support
For those who have applied for long-term personal loans through traditional means and not via instant loan apps, contacting customer support is an essential step. Borrowers should send a clear and precise cancellation request via email or a formal letter to the customer support team. This communication should include the following details:
- Loan application number
- Borrower’s full name
- Reason for cancellation
- Request for confirmation of cancellation
Additionally, borrowers may need to provide identification documents and any initial loan agreement documents they have signed. Customer support will then guide the borrower through the necessary steps and inform them of any applicable cancellation fees or requirements.
Personal loan manager
If your personal loan is managed by a dedicated personal loan manager, this can simplify the cancellation process. The borrower should contact their personal loan manager directly, either via phone, email, or an in-person meeting. The personal loan manager will be familiar with the borrower's account details and can provide personalised assistance. They will help the borrower navigate the cancellation process, ensuring all required formalities are completed efficiently. The borrower should be prepared to provide reasons for cancellation and may need to sign additional paperwork to finalise the cancellation.
Pre-closure
Pre-closure of a personal loan refers to paying off the remaining EMIs earlier than the scheduled tenure, thereby closing the loan account. This option is typically available only after the loan has been fully disbursed and the borrower has made several repayments. Pre-closure often involves penalty charges to compensate the lender for the interest income they would have earned from the scheduled EMIs. Borrowers considering pre-closure should:
- Review the loan agreement for pre-closure terms and penalties
- Calculate the total pre-closure cost, including penalties
- Contact the lender to initiate the pre-closure process
- Ensure all outstanding dues are cleared
Online methods for personal loan cancellation
In today's digital age, many lenders offer online options for managing and cancelling personal loans. For example, Bajaj Finserv provides a user-friendly online portal where borrowers can manage their loan details. Here’s how to proceed:
- Log in to Services: Access your account with Bajaj Finserv
- Navigate to loan details: Find the section with your personal loan details.
- Submit a cancellation request: Look for an option to cancel the loan application and submit the request.
- Follow up: Check for confirmation and follow any additional instructions provided by the lender.
For specific guidance, visit the personal loan details page. If you need further assistance, you can contact their personal loan customer care number.
Offline methods to cancel a personal loan
Via customer care
Borrowers can also cancel their personal loan applications through the lender’s customer care service. This involves:
- Calling customer care: Reach out to the lender’s customer service hotline.
- Providing details: Share your loan application number and other relevant details.
- Requesting cancellation: Clearly state your intent to cancel the loan and provide reasons if necessary.
- Following instructions: Adhere to any additional steps or document submissions required by the customer care representative.
Via branch visit
Visiting the nearest branch of the lender is another effective method for cancelling a personal loan. Here’s what to do:
- Locate the nearest branch: Use the lender’s website or customer service to find the closest branch.
- Prepare documents: Bring identification, loan application documents, and any other relevant paperwork.
- Speak to a representative: Explain your intention to cancel the loan and provide all necessary details.
- Complete formalities: Follow the instructions provided by the branch representative to complete the cancellation process.
By understanding these methods and the required documents, borrowers can effectively manage the cancellation of their personal loans, ensuring a smooth and hassle-free process. Top of FormBottom of Form
