You can close your IDFC loan either by regularly repaying the loan till the tenure completion or pre-close the loan to immediately reduce your debt burden. Closing an IDFC loan can stop the continued financial outflow towards your borrowings, however, for this, you need to follow a certain process for proper loan closure.
You could also choose foreclosure of IDFC loan at any point, depending on your financial situation. However, before you choose to foreclose it, you should know more about the factors surrounding the prepayment of IDFC loans.
Additional read – IDFC bank FASTag
What are the disadvantages of pre-closure of the IDFC loan?
- Lock-in period: Even if you have the necessary funds to prepay your IDFC loan, you may have to wait for the lock-in period to be over, if applicable.
- Pre-payment charges: The bank may have a policy of charging pre-payment fees on certain categories of loans. In such cases, you might have to pay extra charges towards the pre-closure of the loan.
- Prioritising repayment over investments: To foreclose an IDFC loan, you might have to reduce expenses in other areas. Therefore, saving, investing funds or setting up an emergency fund may have to be put on hold.
Is there any penalty for foreclosure of IDFC personal loan?
IDFC personal loan usually comes with a lock-in period of about a year. Post this, the borrower can prepay the outstanding loan amount to save on the total interest payable. However, a borrower might have to pay interest towards pre-payment too. The rates can vary depending on the loan tenure and total loan amount.
Also Read : Personal Loan