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Loans do feel like a debt and like everyone, my sister too wanted to get over with her personal loan debt. She had taken a personal loan from SBI and she wanted to foreclose it after almost one year. But she wasn’t aware of SBI personal loan preclosure charges. So, when she went to the bank to foreclose her loan, the bank officials told her that to foreclose she had to pay
3% on the prepaid amount.
SBI charges this fee only if you choose to repay the loan amount before the end of the agreed-upon term. They informed her that this fee is intended to compensate the bank for the loss of interest income they would have earned had you continued to make payments over the full loan term.
The bank staff told my sister that the pre-closure charge for SBI personal loans is typically 3% of the outstanding loan balance. But they also shared some exceptions to this rule. They told her that if you have taken out a Rent Plus personal loan, the pre-closure charge is only 1% of the outstanding loan balance.
They gave her a
breakdown of the pre-closure charges for SBI personal loans:
Fixed-rate personal loans: 3% of the outstanding loan balance
Floating-rate personal loans: 3% of the outstanding loan balance
Rent Plus personal loans: 1% of the outstanding loan balance
My sister wasn’t sure if she wanted to foreclose her loan after learning all these facts about foreclosure and knowing the SBI personal loan pre closing charges. So she decided to not foreclose her personal loan.
However, I would like to tell you that these
pre-closure charges are applicable only if you repay the loan amount within the first three years of the loan term. After three years, there are no pre-closure charges.
Get personal loans without hefty paperwork through NoBroker Read More: Does Foreclosure Affect Your CIBIL Score?I was really confused about the pre closure charges for personal loan SBI. As I wanted to pre close my personal loan, I visited the bank and asked the loan executive about it. That is when I learned that no pre-payment or pre-closure penalty will be levied for any of the personal schemes after 2 years of disbursement of the personal loan.
What is the Pre Closure Charges for SBI Personal Loan?
The loan executive states that foreclosure charges of 3% + GST on Theo balance are to be levied only if the loan is closed within 2 years from the disbursement of the loan. If you are foreclosing the personal loan after 2 years of the loan disbursement with the help of another loan under the scheme, no SBI pre closure charges for personal loan will be levied.
Is Prepayment Allowed in Personal Loan?
The prepayment rule for personal loan varies. Usually, borrowers can foreclose or prepay their loan 6 months after the loan has been disbursed.
Prepaying your loan is a good option, as it reduces your debt burden. You can always visit SBI’s official website or your nearby branch to learn more details about it.
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Is there any Processing Fees in SBI Personal Loan?
For the early repayment of the outstanding amount or for the preclosure of personal, banks do levy a charge. Since my husband has done the preclosure of personal loan, I am well aware of the preclosure of SBI personal loan charges. You need to understand that no preclosure charges are levied by SBI except for Rent Plus, in which 1% of the loan amount prepaid is charged as a prepayment penalty.
What are the SBI Pre Approved Personal Loan Pre Closure Charges?
There are certain conditions levied on SBI yono loan pre closure charges. Here are the two aspects of it:
Prepayment penalty:
1% + GST is levied quarterly on the prepaid amount if it is prepaid within two years from the date of loan disbursement
Foreclosure charges:
Foreclosure charges, which are around 3% + GST on Theo balance (theoretical balance) are levied only if closed within two years from the date of disbursement of the loan
I would, however, suggest you visit the bank and ask the loan executive for more details. The charges might vary based on the outstanding loan amount so you better be sure about them.
Enjoy Hassle-Free Auto-Repayment Options on Your Personal Loan via NoBrokerRead More:
How to Close Personal Loan Early?
What are the Pre Closing Charges for SBI Personal Loan?
Nandini
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November 24, 2023
2023-11-24T15:21:59+00:00 2023-11-24T15:22:00+00:00Comment
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Personal Loan
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