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rupesh (team )     05 September 2014

Froreclosure of personal loan from hdfc bank

Dear Sir,

I had taken a personal Loan of Rs 8 lakh from HDFC bank in June 2014.I have paid 2 EMI till date.But now the purpose for which i had taken the loan no more exist and i want to foreclose my personal loan,I am ready to pay the penalty charges incurred by the bank as the loan is of no use to me any more. But the bank say i cannot close the loan as they have the lock-in period of 12 months & i cannot close the loan before 12 months.But I wanted to close the loan as the amount is just lying in my account without getting used & i am unnecessary paying the EMI which is creating an extra burden on my expenses.

Note:- I am ready to pay the penalty to foreclose the loan

Please suggest how to get out from this situation.

Rupesh

9920673742



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 7 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     05 September 2014

Here is the procedure
  • Call up your HDFC bank customer care and ask in which branch you need to close the loan. Loan is not closed at all branches. Usually it is closed in head office of that city. 
  • Things to carry before going to bank
    • Xerox copy of ID proof
    • Amount can be paid in form of Cash/ Cheque
    • Loan account number
  • Fill up the form given at the  branch and handover the cheque
  • Remember you might need to pay penalty if there are any preclosure charges. For personal loans as of now it is 4% of the remaining principal for HDFC. As per RBI new norms (not passed as of now), penalty charges should be waived. The closure 
  • Once you have handovered the cheque, they will give an acknowledgement form. Keep that copy safely until you have received the loan closing agreement. This will be mailed to you by the  bank to your registered address.
  • Remember, if the duration between closing date and EMI date is very near (not sure of exact number of days), the EMI will still be deducted. However it will be refunded back in 10 working days.
  • Update: The EMI deducted which is refunded back will be paid with interest (same interest as your personal loan)
  •  

Kumar Doab (FIN)     05 September 2014

Narrate all representations that you have made (mention names, dates,etc) in writing under proper acknowledgment to BM and escalate if required to MD

aditya.puri@hadfcbank.com

IN the meantime show the loan brochure, loan application, loan approval letter, loan agreement, loan a/c statement to your lawyer...............................and proceed under expert advice of your lawyer.

It is expected that due to internal policies of the employer bank for its employees they may not offer any resolution to you and hence obtain written reply from bank.

Your lawyer would know how to handle it.

rupesh (team )     09 September 2014

Thank you Mr.Ramacharya & Mr.Kumar , but HDFC is saying i cannot close the loan before 12 months & it is their policy.But i wanted to close the loan any how because the amount is not getting used & i am unnecessary paying the EMI .Please let me know what do i do in this situation.

Rupesh

Satish Reddy Revuri   29 October 2015

Hi Rupesh,

I'm facing exactly the same problem with personal loan closure in HDFC bank in less than one year. Can you please suggest how you did you overcome this.  Doing balance transfer to AXIS bank and then go for pre-closure is one option I came to know about but not sure if there are any other implications. 

Could you please suggest if you are aware of any other solution to this.

Thanks,

Satish

DIPAK RATHOD   20 December 2017

My dear, Bank has given you some sort the money when you need it so, bank has to right to take some period of interest so RBI has decided that you can not close your loan before 12 months, otherwise all people will take a loan for a month and two and bank will keep busy to foreclose it. At present you visit the branch, there is a queue for foreclose your loan. What if you will foreclose it within a two month whether if you pay interest of that 12 month. they have many other works. So you have to wait for 1 year.

Kumar Doab (FIN)     20 December 2017

You may also check with CEPD; RBI.

John arul   31 August 2022

Hi , Could any of you succeed in pre-closing a personal loan with HDFC.?. Kindly let me and the forum know.

I have the same situation. I said would pay all the EMIs with interest for the entire term and penalty. But bank is refusing preclosure. Well, it is additional work for them that's why penalty is charged. The bank also gains penalty, interest and it also reduces the future risk of non-payment. I fail to understand the logic. The bank's and borrowers interests and rights have to be reasonable. But complete refusal to pre-close could not be justified. There has to be some terms if the banks need to discourage pre-closure.

I am planning to escalate further, but is there a legal route.?


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