What is a Loan Foreclosure?
How to Use Foreclosure Calculator
Is there any penalty charge for foreclosing my loan?
Loan foreclosure means that you can repay the remaining loan amount in multiple EMIs in a single payment.This is an existing part of your personal loan process in which you can repay the loan before your specified EMI period.You can select the number of EMIs you have already paid and the month you want to foreclose your loan. 바둑이게임 It helps you calculate the amount of foreclosure.
Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments, but it can also happen when the borrower fails to meet other terms in the mortgage document.
How to Use Foreclosure Calculator
Calculating the foreclosure loan amount with the help of a foreclosure calculator is a simple process that aids in the calculation of the pending balance of the loan amount along with the interest payment by calculating pending installments. A foreclosure calculator does the pre payment calculations based on the below details,Enter the following details and calculate the amount of foreclosure.
Your Loan Amount (Between 1 to 15 Lakhs)
Duration (between 1 to 5 years)
Interest rate
Number of EMIs you have already paid
The month you want to foreclose your loan
This is the month you can repay the entire loan amount in advance. E.g. If your loan term is 5 years (60 months) and you plan to repay the remaining loan after 3 years and 4 months (40th month), then that month (the 40th month mentioned above) will be your foreclosure month.
Is there any penalty charge for foreclosing my loan?
After you pay more than one EMI, you will be charged a foreclosure fee of 4% of your outstanding principal.When the borrower decides to pre pay the balance loan amount at a go, he/she is liable to pay a certain percentage of the outstanding loan amount as foreclosure charges, which is also called pre payment penalty. While the foreclosure charges are different for different banks and financial institutions, it usually varies between 2% to 5% plus the applicable taxes.
The lender charges this penalty to compensate for the lost interest income due to the pre closure of the loan. Hence, it is important that you calculate the pre payment penalty and carefully evaluate your financial position before taking the decision of foreclosing your outstanding loan in order to minimise your pay out.