Understand the pre-closure charges for Shriram Finance Personal Loans and compare them with other top lenders on Bajaj Markets.
Foreclosing your Shriram Finance Personal Loan lets you settle the outstanding balance before the loan tenure ends. This helps you cut down on future interest costs and lower your overall financial burden.
However, it is important to understand the applicable pre-closure charges, necessary steps, and the procedure before making this decision.
You cannot pre-close your personal loan with the lender within the first 12 months of the initial EMI. After 12 months, foreclosure is allowed with certain charges. The following table outlines the applicable fees:
| Particulars | Details |
|---|---|
| Foreclosure After 12 Months |
Up to 4% of the outstanding amount |
| Foreclosure if Another Financier Takes over the Loan |
An additional 2% on the applicable charges |
Disclaimer: The details mentioned above are subject to change at the lender’s discretion.
Before you pre-close your Shriram Finance Personal Loan, you need to fulfil certain requirements to ensure a smooth process.
The loan needs to be active for at least 12 months from the first EMI before pre-closure.
Clear all pending EMIs and charges before applying for the foreclosure process.
Submit a written application or request to Shriram Finance Limited indicating your intent to pre-close the loan.
You can easily pre-close your personal loan to save on interest. Here is how:
Carefully examine your loan agreement to understand the foreclosure policy, applicable charges, and required notice period. Knowing these details helps you plan the pre-closure effectively and avoid unexpected costs.
Contact Shriram Finance Limited to request a detailed foreclosure statement. This document outlines the outstanding principal, accrued interest, and any applicable charges as of the proposed closure date.
Ensure you have sufficient funds to make the pre-closure payment in full. You may need to liquidate investments or arrange other sources of funds to meet the required amount.
Initiate the process by submitting a written request along with any necessary documents. In some cases, a No Objection Certificate from co-applicants may also be required.
Pay the outstanding amount on the specified date either online, via cheque, or draft. Obtain the foreclosure receipt as proof of payment for your records.
Follow up with Shriram Finance Limited to obtain a No Dues Certificate. This certificate formally confirms the closure of your personal loan account.
After a few months, review your credit report to confirm that the loan is marked as “closed.” This step helps maintain an accurate credit history and reflects timely repayment.
Pre-closing a personal loan can be beneficial in certain situations, but it also has some drawbacks. Here is a quick look at both sides:
Save on Interest Costs: Pre-closure of the Shriram Finance Personal Loan reduces the total interest you pay by shortening the loan tenure.
Free Up Monthly Cash Flow: It eliminates EMIs, giving you more disposable income each month.
Better Loan Terms in Future: With an improved credit score, you may qualify for new loans at lower interest rates.
Foreclosure Charges: Pre-closure fees can add to your total loan cost, which may reduce the overall savings from repaying the loan early. Ensure you are saving money before you go ahead.
Requires Large Lump Sum: Pre-closing the loan may require a significant amount of money. Ensure that this doesn’t strain your finances.
Before pre-closing your Shriram Finance Personal Loan, evaluate your financial position and the impact of early repayment. Keep the following points in mind:
Check your loan agreement for prepayment penalties or fees, as these may reduce the overall benefit of early repayment.
Review the remaining loan amount. Pre-closing a larger balance can lead to greater interest savings compared to a smaller balance.
Analyse how early repayment will affect the loan tenure and overall cost. A loan calculator can help you estimate the impact clearly.
Confirm that making a lump-sum payment will not strain your budget. Consider your current finances and future cash flow before proceeding.
Different lenders follow varied policies and fees for pre-closing personal loans. The table below outlines the pre-closure fees applicable with leading lenders on Bajaj Markets. You can use this comparison to plan and manage your loan closure effectively:
| Lender Name | Pre-closure Charges |
|---|---|
| Bajaj Finance |
Up to 4.72% on the outstanding amount |
| Federal Bank |
3% of the outstanding loan amount + 18% GST |
| Fibe |
Nil |
| Finnable |
5% of the outstanding loan amount |
| InCred |
Up to 5% + applicable taxes |
| Kissht |
Nil |
| Kotak Mahindra Bank |
|
| KreditBee |
Nil |
| L&T Finance |
5% of principal outstanding + applicable taxes |
| Freo (formerly MoneyTap) |
Nil |
| Muthoot Finance |
2% to 6% of the outstanding loan amount |
| Piramal Finance |
5% on the outstanding amount |
| Privo (Credit Saison) |
Nil |
| SMFG India Credit |
0% to 7% of the outstanding principal |
| Upwards |
5% of the outstanding loan amount |
| YES BANK |
Up to 4% on principal outstanding |
Disclaimer: The details mentioned above are subject to change at the lender’s discretion.
Yes, you can pre-close your Shriram Finance Personal Loan after completing 12 months from the first EMI. However, pre-closure will attract applicable charges.
Pre-closure within 12 months of the first EMI is not permitted. After 12 months, you can pre-close the loan by paying up to 4% of the outstanding principal as pre-closure charges.
Foreclosure charges cannot be entirely avoided, but you may minimise them. Check with Shriram Finance Limited for any applicable waivers or special schemes that could reduce these charges.