Preclosing a L&T Finance Personal Loan can help reduce interest payments and lower the overall borrowing cost. However, certain terms and conditions apply, including preclosure charges and specific payment requirements. To ensure a smooth process, understanding the preclosure steps and requirements is essential. Here’s everything you need to know about L&T Finance Personal Loan preclosure.
L&T Finance usually levies a preclosure fee amounting to 5% of the outstanding loan amount and GST when you choose to foreclose a loan. The applicable charges typically depend on factors such as the loan amount, repayment history, and time elapsed since disbursement.
To get an accurate estimate, contact L&T Finance customer support or check your loan agreement to confirm:
The minimum lock-in period before you can foreclose your loan
The applicable foreclosure charges on your personal loan
Any additional outstanding dues that need to be settled before preclosure
Before initiating the preclosure, ensure that you fulfil these essential conditions:
Pay All Outstanding Dues
Any unpaid interest, penalties, or fees must be cleared before proceeding with preclosure. This ensures that the loan is fully repaid without any remaining financial obligations.
Make a Lump-sum Payment
L&T Finance requires borrowers to pay the entire outstanding principal in one go to foreclose the loan. Partial payments may not qualify for preclosure.
Use Approved Payment Methods
To ensure compliance and avoid delays, verify the accepted payment methods with L&T Finance. These typically include:
Net banking
NEFT/RTGS transfers
Demand drafts or cheques drawn in favour of L&T Finance
Follow these simple steps to successfully pre-close your loan:
Check Your Loan Agreement
Review the terms and conditions related to preclosure charges, eligibility, and penalties. This will help assess whether closing your loan early is financially beneficial.
Contact L&T Finance
Reach out to L&T Finance via their customer service helpline or visit their nearest branch. Request for a preclosure statement detailing:
The outstanding loan amount
The preclosure fee (if applicable)
The final payable amount
Review the Preclosure Statement
Verify the statement to ensure that all calculations, charges, and pending dues are accurate. If you have any discrepancies, get them resolved before making the payment.
Make the Full Payment
Pay the total outstanding amount using an approved payment method. Keep the transaction receipt for reference.
Collect the No Objection Certificate (NOC)
Once the loan is fully settled, L&T Finance will issue a No Objection Certificate (NOC). This document serves as proof of loan closure and should be stored safely.
Check Your Credit Report
After preclosure, ensure that your loan account is updated as ‘Closed’ in your credit report within 30-45 days. If the status remains unchanged, raise a dispute with the credit bureau to correct the information.
Before deciding on preclosure for L&T Personal Loan, weigh its advantages and drawbacks.
Benefits of Preclosure
Lower Interest Costs – Paying off your loan early eliminates future interest payments, reducing the total cost of borrowing.
Improved Debt-to-Income Ratio (DTI) – A lower DTI enhances your creditworthiness, making it easier to qualify for future loans.
Reduced Monthly Obligations – Foreclosing a loan frees up funds for other financial commitments.
Drawbacks of Preclosure
Preclosure Charges – Depending on the loan agreement, a foreclosure fee may apply, reducing potential savings.
Impact on Savings – Using a large portion of your savings for preclosure may leave you with fewer emergency funds.
Temporary Dip in Credit Score – Closing a loan early can reduce the average age of your credit accounts, leading to a slight temporary drop in your CIBIL score.
To ensure a hassle-free preclosure, consider the following:
Compare Costs & Benefits – Weigh the savings on interest against any preclosure fees to make an informed decision.
Clear All Dues Beforehand – Ensure that all outstanding charges (including penalties and unpaid EMIs) are paid before requesting preclosure.
Obtain an NOC & Loan Closure Confirmation – Collect the No Objection Certificate (NOC) as proof of successful preclosure.
Monitor Your Credit Report – Verify that your credit report reflects the loan closure within the expected time frame.
For any queries regarding personal loan preclosure, reach out to L&T Finance through the following channels:
Registered Office: Brindavan, Plot. No. 177, CST Road, Kalina, Santacruz (East), Mumbai 400 098
Customer Support Helpline: 1800-268-0000 (Toll-free)
E-mail ID: customercare@ltfs.com
