Understanding Pre-Closure Charges for ICICI Bank Personal Loans: A Guide
Given a personal loan with 60 Equated Monthly Installments (EMIs) at ICICI Bank, and having made 35 EMIs without a break, you might be wondering about the charges associated with pre-closing the loan account. This article will guide you through the process and the associated costs.
The Process of Pre-Closing a Personal Loan
Pre-closing a loan involves paying off the remaining principal amount of the loan, along with any applicable pre-closure charges. Here’s a step-by-step guide on how to proceed:
1. Pre-Closure Charges
ICICI Bank often levies pre-closure charges, which can range from 2 to 5 percent of the outstanding principal amount on your personal loan. The exact percentage can vary based on the terms of your loan agreement. It is advisable to verify these details by checking your loan agreement or contacting ICICI Bank directly for specific information relevant to your loan account.
2. Outstanding Principal Amount
In addition to the pre-closure charges, you will need to pay off the remaining principal amount of the loan. Ensure you understand the current outstanding principal amount and the pre-closure charges before proceeding.
3. No Dues Certificate
Upon making the final payment, you should request a No Dues Certificate from the bank. This document confirms that your loan account has been fully settled. It is important to have this certificate to avoid any future complications.
Factors Influencing Pre-Closure Charges
The pre-closure charges for an ICICI Bank personal loan can vary based on several factors, including the type of loan, the loan amount, and the repayment tenure. In general, ICICI Bank levies pre-payment charges that can range from 0 to 5 percent of the outstanding principal amount, depending on the loan tenure and the time elapsed since the loan was disbursed. It is always best to check with the bank for the most accurate and up-to-date information before proceeding with the pre-closing process.
Calculation of Pre-Closure Charges
The pre-closure charges are typically levied on the outstanding principal amount of the loan as of the day of calculation or payment. For example, if you have 25 EMIs remaining and your loan amount is INR 1,000,000 with an outstanding principal amount of INR 500,000 after 35 EMIs, the pre-closure charge could be 5 percent of INR 500,000, which amounts to INR 25,000. Additionally, ICICI Bank may also charge a non-refundable processing fee, which can be up to 2.25 percent of the loan amount with applicable tax. In some cases, the charges may also include GST.
Steps for Pre-Closing Your Loan
To ensure a smooth pre-closing process, follow these steps:
Check your loan agreement for specific pre-closure charges and terms. Contact ICICI Bank’s customer service to confirm the details and to request the No Dues Certificate. Visit your nearest ICICI Bank branch if necessary for verification and processing. Make the final payment, including the pre-closure charges and any remaining principal amount. Request the No Dues Certificate to officially close your loan account.Additional Resources
If you are seeking more detailed information, you can refer to the ICICI Bank’s official website or consult with a financial advisor for personalized guidance. Understanding the pre-closure process and associated charges can help you make informed decisions and avoid any unexpected costs.
By following these guidelines and steps, you can successfully pre-close your ICICI Bank personal loan while managing the associated charges effectively.