Personal Loan Closure Procedure That Needs To Be Followed

Taking personal loans help many individuals to ease their financial crunches. However, taking a loan also means that you have closed that loan within a specific period in order to avoid any late penalties. There are some additional advantages, including a affect of your credit scores , in paying off your loans before the stipulated time.Nonetheless, there are some basic procedures that need to be followed while closing a personal loan, whether it’s a regular closure or a pre-term closure.

1. In case of a regular loan closure, you have paid a stipulated amount and number of EMIs for repayment.
2. Once you have reached the end of the loan amount, it is important that you visit your bank and inform them regarding the same so that they can cross-verify your claim.
3. Carry your identity proof, loan account number and a cheque if you have any outstanding amount. These documents will be verified by the officials before closing the loan account.
4. After closing the loan account, you would need a No Objection Certificate (NOC) from the bank, that will serve as a proof of loan account closure by full repayment.
5. There is also an option to contact the customer care support about how to close your loan account.

1. In cases of pre-closure, the basic procedure remains the same wherein you inform the bank to check the outstanding loan amount for repayment.
2. Visit the bank with all the necessary documents such as ID proof, your bank passbook, account details, the necessary information regarding your EMIs and a cheque to clear the remaining dues if any.
3. Some banks levy penalty on pre-payment, which has to be settled along with the loan amount. Ask your lender about such charges.
4. Once you have completed all the formalities and closed your loan account, you will be issued an acknowledgement letter with the details of clearances by the bank. This should be preserved for any future references that might arise.
5. In some cases, you can also procure a No Dues Certificate (NDC) from the lender.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.