If you find yourself in need of money, an instant personal loan is one of the best options you can choose to ride out the bad times. The best part of it is that you can use it for any purpose unlike vehicle loans or property loans. 

Interest rates for instant personal loans can start anywhere at 11% and go up to 35% based on the credit risk assessment and underwriting norms. 

Experts say that if you are looking to decrease financial burden, then you should begin by paying off the loan with the highest interest rate (in case you have taken multiple loans). On that note, let’s find out how to close an instant personal loan.

Procedures To Close An Instant Personal Loan

3 ways to close your personal loan – 

  • Regular monthly installments (EMIs)
  • Pre-pay the loan
  • Pre-pay a part of the loan

Once the payment is cleared, here are some things you will need.

  • Personal loan account number which you can find on the loan statement. You can also log into net banking and download the statement.
  • Identity proof – Passport, PAN, Aadhaar
  • Other documents related to loan  – loan sanction letter, loan account statement
  • Pre-closure quote – Talk to your loan officer about prepayment penalties and get the complete quote to pay the ‘outstanding plus charges.’
  • To pay off before the actual due date, you have to take a cheque in favour of the bank from which you have availed the loan and pay it off.

Closure

  • Visit the bank with all the required documents
  • You will have to write a letter addressing the manager for pre-closure
  • Alternatively, you may be asked to fill out a form
  • Pay off the amount
  • Sign the required documents
  • Take the acknowledgement of the balance to be paid off
  • Keep the loan closing document safely

Why You Need To Close Your Loan

  • To clear your name of outstanding dues
  • Reduced EMI value
  • Improved credit score

Advantages Of Pre-Paying Your Loan

  1. Reduction in loan tenure
  2. No Prepayment charges in case of floating interest rate

Disadvantages Of PrePayment of Your Loan

  1. Prepayment charges 
  2. Lock-in period in case the lender has mentioned in the loan terms
  3. You might be losing a large chunk of your savings

We hope this blog helped you understand the basic procedure to close your loan. Most lenders follow the same procedure. You can also take the help of your loan officer – he is the agent hired by the bank to follow your case up. Take control of your finances with more tips from FlexSalary in the coming blogs.

FlexSalary is an instant line of credit offering by Vivifi India Finance Private Limited which is an RBI based NBFC. For more information, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *