Home Loan foreclosure query

nRiTeCh

Skilled
I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
 

6pack

ex-Mod
Do you mean prepay the entire loan amount? You need to go to the bank to get your answers. Typically the banks don't hold your documents. They give them to 3rd party people for keeping in some warehouse.

You can pay off the entire outstanding balance through RTGS, NEFT or through cheque.

You can expect about 10-15 working days or less to get your original documents in hand and the bank will call you to get them. Some banks charge some percentage, or some fees for prepayment of loans, some don't.
 

indy1811

Skilled
nRiTeCh said:
I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
Click to expand...

Foreclosure may affect your credit score.

Typically foreclosure charges are waived off after a time period depending on the duration of your loan. Have you checked your amortization schedule? The first few years of EMIs, the interest component may be more than the principle.
 

Futureized

Skilled
nRiTeCh said:
I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
Click to expand...
Had no issues with foreclosure with ICICI around 10 years ago. (a known person was SENIOR at that time)

1. There were minimal charges (in thousands compared to interest on loan, which was more then lakhs)
2. Yes, differs among banks.
3. Walk-in to branch always suggested.
4. Mine received within 1 month

Suggestion: Deal/Talk/Communicate with only 1 person as far as possible in branch, who has all authority for foreclosure.
 

panks21

Recruit
Since past few years, RBI has issued guidelines that there should be no charges for foreclousure if the loan was taken for non-business purposes.
You should be able to pay the balance amount by netbanking post informing the bank about your intent to close the loan account. I believe the process is quite smooth these days
 

frozenscotch

Disciple
This is for icici, should be similar with Kotak, my answers are in line with ur qstns
nRiTeCh said:
  • Are there any home loan foreclosure charges? For home loans NO
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nRiTeCh said:
  • Whats the most common process for foreclosure or does it differs across Bank? It's very simple now a days, u need to fill a form regarding foreclosure and pay the amount may be by cheque or online thru RTGS and give its details along with the form. Your original docs will be fetched by bank and they will hand over them to you in a week or two.
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nRiTeCh said:
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch? There are 2 options - Prepayment and Foreclosure, if ur online banking has the option, u can try, but since u want to foreclose, better approach the bank as u need to fill a form too. And I belive you can walk in to any branch, not just home branch where u have the loan a/c
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us? Within 2 weeks, and in hand, as they are original property docs, better collect in person. Person on whom loan a/c is opened should be present
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kalph09

Disciple
I had closed my home loan from Axis a few years ago.

1. Check your loan TnC. After crossing certain amount of EMI or years there are no foreclosure charges.

2. Call your bank's loan department and get an appointment for closure. Carry a cheque, loan related papers and photo copy of your sale deed.

3. Not with axis. They had 2 options. Pay with a cheque or provide authorisation to debit the amount from your bank account. (Only if it's Axis)

4. They take about 7-10days to return the documents. You need to collect (carry photo copy to match them) in person along with no dues acknowledgement.