Pre-closure charges are applicable for IDFC Bank loan repayments in India. When an individual or company makes a decision to close their loan account before the term of the loan has expired, a pre-closure charge is applicable. This charge is levied by the bank to cover the cost of the loan’s processing and administration, which may vary depending on the type of loan taken. Pre-closure charges are applicable for IDFC Bank loan repayment in India, and they are usually based on a percentage of the loan amount. This charge is typically a certain percentage of the principal loan amount and is payable at the time of pre-closure.ย
The rate of pre-closure charges applicable to IDFC Bank loan repayment in India may vary depending on the loan type, tenure, and other factors. Pre-closure of a loan involves the closure of an account before the term of the loan has expired. This may be beneficial for some, as it can help them save on interest payments. However, there are some drawbacks associated with the pre-closure of a loan. One of the major drawbacks is the pre-closure charge that is applicable in such cases. Thus, it is important for individuals and companies to be aware of the pre-closure charges applicable for IDFC loan payment in India before making a decision to close their loan account.
In India, IDFC Bank provides various loan products to its customers to meet their financial needs. IDFC Bank allows its customers to pay their loan in full or in part before the loan tenure expires. This is known as the pre-closure of the loan account. Although pre-closure of the loan helps customers clear their loan burden easily, IDFC Bank charges certain pre-closure charges on the loan account. This article explains the pre-closure charges applicable for a loan repayment with IDFC Bank.
What are Pre Closure Charges
Pre-closure charges are the fee that a borrower needs to pay to IDFC Bank for closing the loan account before the loan tenure expires. Pre-closure charges are usually deducted from the loan amount that the borrower pays to the bank. The pre-closure charges are applicable for all loan products offered by IDFC Bank, including quick loan pay and loan payments.
When can a Loan be Pre Closed
IDFC Bank allows its customers to pre-close their loan accounts after at least six months from the loan disbursement date. For example, if the loan disbursement date is January 1, 2021, the loan account can be pre-closed on July 1, 2021. The pre-closure charges applicable to the loan account depend on the period of repayment.
How Much Pre Closure Charges are Applicable
IDFC Bank charges pre-closure charges depending on the loan amount and the period for which the loan is outstanding. For a loan amount up to Rs. 10 lakh, the pre-closure charges are 4% of the loan amount for loans outstanding for a period of up to 1 year, 3% for loans outstanding for a period of 1โ2 years, and 2% for loans outstanding for more than 2 years.
For a loan amount above Rs. 10 lakhs, the pre-closure charges are 3% of the loan amount for loans outstanding for a period of up to 1 year, 2.50% for loans outstanding for a period of 1โ2 years, and 2% for loans outstanding for more than 2 years.
Exemptions from Pre Closure Charges
IDFC Bank offers some exemptions from pre-closure charges. These exemptions are applicable for loans taken for specific purposes. These exemptions include:
- Loans taken for agricultural purposes are exempt from pre-closure charges.
- Loans taken for educational purposes are exempt from pre-closure charges.
- Loans taken for medical purposes are exempt from pre-closure charges.
- Loans taken for housing purposes are exempt from pre-closure charges.
The pre-closure of a loan account helps customers clear their loan burden early. IDFC Bank charges certain pre-closure charges on the loan account. These charges depend on the loan amount and the period of repayment. There are certain exemptions from pre-closure charges applicable to loans taken for specific purposes. Hence, it is important for customers to be aware of the pre-closure charges applicable for loan repayment with IDFC Bank.
IDFC Bank has taken a bold step to make loan repayment more efficient and convenient by introducing pre-closure charges. This will allow customers to pay off their loan amount in a much quicker and easier way. The charges are minimal and are determined on the basis of the loan amount and loan tenure. This will also help customers save on interest payments as the pre-closure charges are much lower than the interest payments. This move by the bank will help customers in many ways, including reducing their financial burden and improving their credit score. It will also enable them to make better financial decisions in the future. This move by IDFC Bank is a positive step towards making loan repayment easier and more convenient.