What is a Loan Foreclosure | Types of Loan Foreclosure

Most of us avail of loans to fulfill our dreams of buying a two-wheeler, a home, a car, or other consumer products which otherwise seem to be out of the reach due to financial dependencies. While taking a loan, a borrower decides the repayment tenure basis the repayment capacity of an individual.

The borrower is liable to repay the loan within that stipulated time period as per the loan terms, however, sometimes there is a change in the income level due to a promotion, new job, incentives, etc. which increases the customer’s capacity to pay back the loan. This provides the customer with an opportunity of repaying the loan before the maturity of loan tenure and this repayment of the loan in one single payment is known as a foreclosure in the financial terms.

Types of Foreclosure:

  • Foreclosure (FC)

    Where the borrower makes full and final payment and closes the loan account.
  • Partial Foreclosure (PFC)

    Where the borrowers make payments in part and settle future installments in advance. Partial Foreclosure reduces the last installments basis the part payment made by the customer.

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How to Foreclose Your Loan With Bajaj Auto Finance:

You can foreclose your loan account by logging in to your customer account or alternatively you can download our My BAFL app.

Are There Any Foreclosure Charges:

Yes, there might be foreclosure charges depending upon the loan tenure and EMIs paid to date.

Loan Foreclosure Charges:

  • Before 12th EMI is paid: 3% on principal outstanding amount + GST (as applicable for loans disbursed w.e.f. 22nd July 2015)

  • After the 12th EMI is paid: Nil charges

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Partial Foreclosure:

  • Nil charges

  • Amount foreclosed is adjusted against the last EMIs

Download our Mobile App ‘My BAFL’ from Google Play Store or Apple Store to pay foreclosure or partial foreclosure amount of your loan.

If you are looking for a new two wheeler loan, click here to apply or for further information, please refer to our FAQs in the Menu Option.

*Terms and Conditions Apply. Finance at the sole discretion of Bajaj Finance Ltd.

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