First, you should find out how much is the outstanding amount of your personal loan. You can get this information by visiting the bank branch. Also, ask about any fees you will need to pay for closing the personal loan early.

A personal loan is helpful when there is a sudden need for funds. It can cover expenses like medical bills, education fees, or other unexpected costs. However, the process of closing a personal loan can seem a bit confusing. Don’t worry! Closing a personal loan offline is generally the same at most banks, with only minor differences in terms and conditions.

Step-by-Step Process to Close Personal Loan Offline

1. Check the Outstanding Loan Amount

First, find out the exact outstanding amount of your loan. You can get this information by visiting your bank branch. Also, inquire about any charges or fees you need to pay for pre-closing the loan.

2. Decide How to Close the Loan

Determine if you want to close the loan early by paying the full amount (foreclosure) or by completing all EMIs as per the loan term. Ask the bank about any pre-closure charges, such as fees or penalties, for early payment.

3. Submit the Application Form

Obtain an application form from the bank to close your personal loan. Fill out the form with details like your account number, name, and reason for closing the loan. For foreclosure, mention the payment mode, such as cash, cheque, or bank transfer.

4. Pay the Outstanding Amount

For foreclosure, the bank will provide the total outstanding amount, including interest and charges. Pay this amount through cash, cheque, demand draft, or RTGS/NEFT.
If you are completing the loan as per the regular schedule, ensure all EMIs have been paid on time. Don’t forget to collect payment receipts to avoid future issues.

5. Request a No Objection Certificate (NOC)

Once the payment is completed, request a No Objection Certificate (NOC) from the bank. This certificate confirms that you have fully paid your loan and that the account is closed.

6. Collect Important Documents

After closing the loan, collect all original documents or securities submitted as collateral with the bank. Also, ask for a final loan statement summarizing all payments made.

7. Check Your Credit Report

After closing the loan, check your credit report to ensure the loan account is updated as “closed.” If it hasn’t been updated, contact your bank to rectify this.

Bonus Tips

  1. Keep copies of all important documents like receipts, NOC, and loan statements for future reference.
  2. Confirm the required documents and process them with the bank beforehand to avoid multiple trips.
  3. Inquire about the foreclosure fee (usually 2-5%) and lock-in period in advance to avoid surprises.
  4. By following this step-by-step process, you can easily close your personal loan offline and enjoy a debt-free life.