Personal Loan

At Paisabazaar, we offer pre-approved personal loan offers from top lenders like IndusInd Bank, Axis Bank, Aditya Birla Capital, Hero FinCorp, Moneyview and more - all in one place. Compare interest rates of pre-approved personal loans available on Paisabazaar.

Also Read: 6 Key Things You Should Know About Pre-Approved Personal Loans

How an Instant Personal Loan Solves Your Urgent Money Needs

An instant personal loan can be your go-to credit solution when you’re dealing with unexpected financial exigencies. Whether it's a medical emergency, last-minute travel plan or urgent home repairs, these loans help you tackle short-term fund requirements without letting you compromise on your emergency fund or crucial financial investments.

Key benefits offered by these loans:

• Instant disbursals
• 100% digital process
• No collateral requirement
• Zero documentation

Instant Personal Loan vs Regular Personal Loan

The differences between an instant personal loan and a regular personal loan are as below

A personal loan is versatile and can be used for almost any purpose, except speculation. Some ideal uses are listed below:

Medical Emergencies

Get immediate funds without waiting for insurance claims.

Debt Consolidation

Combine multiple high-interest debts into one manageable EMI.

Wedding Expenses

Manage large wedding costs without liquidating crucial investments and emergency fund.

Education/Course Costs

Cover education-related expenses when education loans fall short.

Travel & Vacation

Fund unplanned international/ domestic trips with flexible EMIs.

Home Renovation

Upgrade your home without pledging any asset.

Business Expansion

Self-employed professionals can avail the loan for upgrades, equipment purchase, etc. — no assets required, no long waits.

Personal loan eligibility criteria can vary from one lender to another due to their varying credit risk policies. It can also vary as per the loan variant and the occupation profile of the applicant. Here are some of the personal loan eligibility criteria used by most lenders:

• Age: 18 - 60 years
• Salary: At least Rs 15,000 per month for salaried customers
• Income: At least Rs 5 lakh p.a. for self-employed customers
• Credit Score: Preferably 750 and above as having higher credit scores improve the chances of loan approval
• Employment Stability: Usually 1 year with some lenders requiring longer work experience
• Business Continuity: Usually 3 years of business continuity with some lenders requiring longer period of business continuity
• Employment Type: Salaried employees working with government, public sector undertakings, MNCs and other reputed corporates

Also Read: Tips to Improve Your Personal Loan Eligibility

Personal loan lenders require documents from their applicants to establish their identity, income, loan repayment capacity and place of residence. These documents are more or less the same across lenders. Here are a few common set of documents that you will need to submit when applying for a personal loan:

While the fees and charges of personal loans can vary widely depending on lender and the credit profile of the loan applicants, the following table will give you a fair idea of the personal loan fees and charges levied by the lenders:

Other fees and charges levied by the lenders include documentation charges, verification charges, duplicate statement charges and NOC certificate charges.

How to Get a Personal Loan with Zero Processing Fees

The personal loan processing fee charged by lenders can go up to 4% of the loan amount. However, some lenders waive off processing fees during special festive offers or promotional periods. Additionally, some lenders also waive off waivers or discounts in processing fees to their existing customers and/or applicants meeting predetermined cut-offs in terms of their credit score, income, occupation, etc. Thus, it is always a good idea to first approach the banks and/or NBFCs with whom you have your deposits, loans and/or credit card accounts. This should be followed by visiting online financial marketplaces like Paisabazaar to compare various personal loan processing fees offered by multiple lenders and then make the loan application.

Apart from processing fees, loan applicants should also factor in the interest rates while comparing loan options. They should use online APR calculators to compare various personal loan options on the basis of their overall borrowing cost.

You can calculate EMI on your personal loan using the formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1],

where,

• ‘R’ denotes the rate of interest
• ‘P’ denotes the principal amount
• ‘N’ denotes the loan tenure

As manual calculations can be time-consuming and prone to errors, using an online personal loan EMI calculator would be preferable. The calculator requires just a few basic details for EMI calculation, including interest rate, loan amount and tenure. Once the details are entered, the calculator will display the EMI, total interest amount and amortization schedule basis which you can compare various personal loan offers based on your loan repayment capacity.

Factors Affecting Personal Loan EMI

Three major factors that influence your personal loan EMIs are:

• Principal Amount: An increase in the principal amount leads to an increase in your EMI, provided the values for loan tenure and interest rate remain unchanged.
• Interest Rate: Personal loan EMIs increase with every increment in the interest rates.
• Tenure: Choosing a longer tenure on your loans results in lower EMIs. However, it also leads to higher overall interest cost on the loan.

Also Read: What Happens If You Miss a Personal Loan EMI?

The unsecured nature of personal loan increases credit risk for lenders as it leaves them with no collateral or security to compensate their losses in case of loan default. To mitigate this risk, banks and NBFCs factor in various aspects of their applicants’ credit profiles and follow strict eligibility policies when evaluating their loan applications. Those planning to avail personal loan can improve their chances of approval through these tips:

• Maintain your credit/CIBIL score above 750
• Check for inaccuracies in your credit report, as they might adversely impact your credit score and thereby, reduce the chances of loan approval
• Compare the offers available from banks and NBFCs before finalising any loan deal
• Apply for the loan from a bank/NBFC where you have the highest chances of approval
• Avoid making multiple loan applications within a short period

Also Read: CIBIL Score and Personal Loans: What’s the Connection?

Personal loan offered by lenders can range anywhere between Rs 10,000 and Rs 40 lakh. Some lenders may offer higher loan amounts, depending on their discretion and the applicant’s loan repayment capacity. Some banks and NBFCs use the Multiplier Method, wherein the eligible loan amount is calculated on the basis of a predetermined multiple (ranging between 10 and 24 times) of an applicant’s net monthly income.

Other lenders use the EMI/NMI Ratio, wherein the EMI of the proposed loan cannot exceed a predetermined proportion of the applicant. Some lenders also use a combination of both of these methods to find the loan amount eligible of the applicant.

Personal Loan Insurance: Do You Really Need It?

Personal loan insurance can provide financial security by covering your outstanding loan repayments in case of unforeseen circumstances like death, serious illness or disability. However, purchasing this insurance is not mandatory while availing personal loan. If your existing life insurance policy already offers adequate coverage for loan repayment, you may not need to purchase additional loan protection policies.

Best Banks for Personal Loan in India

Given below are a few personal loan schemes offered by some of the leading banks and NBFCs in India:

HDFC Bank

The interest rate of HDFC Bank personal loan starts from 10.90% p.a. The tenure of the scheme can go up to 6 years whereas the loan amount can go up to Rs 40 lakh. The bank also offers pre-approved loans with ‘10 second disbursal’ to its select existing customers based on their credit profiles.

• Interest Rate: 10.90% p.a. onwards
• Loan Amount: Up to Rs 40 lakh
• Tenure: Up to 6 years
• Minimum Salary: Rs 25,000 per month
• Age: 21-60 years
• Credit Score: At least 650
• Processing Fee: Up to Rs 6,500

ICICI Bank

ICICI Bank extends personal loan to cater to the varied financial requirements of its borrowers. The bank also offers Fresher Funding, a special scheme for funding immediate and other financial requirements of younger salaried individuals. For its select existing customers, the bank offers overdraft facility, pre-approved offers and top up loan facility. Its pre-approved offers feature minimal documentation and 3-second disbursals.

• Interest Rate: 10.85% p.a. onwards
• Loan Amount: Up to Rs 50 lakh
• Tenure: 1 to 6 years
• Minimum Salary: Rs 30,000 per month
• Age: 20-58 years (for salaried); 23-65 years (for self-employed)
• Processing Fee: Up to 2% of loan amount

Axis Bank

Axis Bank Personal Loan covers expenses related to wedding, home renovation, travel, medical emergency and much more. The bank also extends pre-approved offers to its select existing customers. Such offers have digital processing and instant approvals. Axis Bank has also collaborated with Paisabazaar to extend its select customers pre-qualified offers.

• Interest Rate: 11.25% p.a. onwards
• Loan Amount: Up to Rs 10 lakh
• Tenure: 6 months to 5 years
• Age: 21 to 60 years
• Minimum Monthly Salary: Rs 15,000
• Processing Fee: Up to 2%

Kotak Mahindra Bank

Kotak Mahindra Bank offers loans only to salaried individuals. Existing borrowers of other banks/NBFCs can avail balance transfer facility to transfer their outstanding loan to Kotak Mahindra Bank at lower interest rates. Those exercising balance transfer facility can also avail top up loans of up to 100% of their loan amount. Kotak Mahindra Bank also offers an overdraft facility, giving borrowers the flexibility of withdrawing their funds from their loan account anytime and repaying it as per their convenience.

• Interest Rate: 10.99% p.a. onwards
• Loan Amount: Up to Rs 35 lakh
• Tenure: Up to 6 years
• Credit Score: At least 730
• Age: 21-60 years
• Minimum Monthly Salary: Rs 25,000 (for corporate borrowers); Rs 30,000 (for non-corporate salary borrowers)
• Processing Fees: Up to 5% of loan amount

IndusInd Bank

IndusInd Bank offers multiple personal loan schemes including wedding loan, home renovation loan, loan for medical expenses and loan for education. The bank also offers balance transfer facility to existing borrowers of other banks and NBFCs. For those requiring quick financing, the bank extends instant personal loan online with quick processing and loan approvals.

• Interest Rate: 10.49% p.a. onwards
• Loan Amount: Up to Rs 50 lakh
• Tenure: 1 to 7 years
• Age: 21 to 60 years (for salaried); 25 to 65 years (for self-employed)
• Processing Fee: Up to 3.5% of the sanctioned loan amount
• Minimum Salary: Rs 25,000 per month

What is a Personal Loan Top-Up and How Does It Work?

A personal loan top-up is an additional loan amount offered to existing personal loan borrowers over and above their outstanding personal loan amount. Like personal loans, top up loans are unsecured and can be used to pay for various financial requirements. They are also faster and easier to avail than a new personal loan, as top-up loans are offered to borrowers who have already undergone the lender's checks for their existing personal loan, allowing them to get approved much quicker. Top up personal loans are usually offered to existing personal loan borrowers having satisfactory loan repayment history and having completed a specified number of EMIs.

Tips to Get Instant Personal Loan Approval

The following are the key steps to take before applying for a personal loan:

1. Check personal loan offers of banks and NBFCs with which you have deposit, loan or credit card accounts.
2. Visit online financial marketplaces such as Paisabazaar to compare personal loan interest rates & other loan features offered by other banks and NBFCs.
3. Check whether the tenures offered by lenders suit your repayment capacity.
4. Compare processing fees and/or admin/login fees charged by various lenders.
5. Compare the prepayment/foreclosure charges and restrictions on making prepayments/foreclosures, if any, by various banks/NBFCs.
6. Check whether the turnaround time for loan disbursement meets your needs.

Personal Loan Repayment Options & Best Practices

For personal loans, lenders usually offer two repayment structures - EMI-based repayment through term loans and flexible repayment through overdraft facility

In the standard EMI-based repayment (term loan) option, the entire loan amount is disbursed upfront and repaid in fixed monthly instalments (EMIs) over a chosen tenure.

This is the most commonly used structure for personal loans, offering predictability and ease of budgeting. On the other hand, the flexible repayment (overdraft facility) structure allows the lender to approve a credit limit from which you can withdraw funds as needed.

Interest is charged only on the amount utilized, not the entire sanctioned limit. This option also lets borrowers park surplus funds to reduce interest burden, with the added benefit of accessing those funds again when required - making it ideal for those seeking flexibility in repayment.

Note: Not all lenders provide overdraft-based personal loan facilities. Availability and terms may vary, so it’s important to confirm with your bank or lender before applying.

Best Practices for Personal Loan Repayment

Timely repayment helps build creditworthiness and avoid late fees. Here are some key practices:

• Choose EMI carefully based on your EMI affordability
• Set auto-debit instructions to avoid missing EMIs
• Prepay whenever you have surplus, but check prepayment charges and terms

Also note, personal loan applicants should not sacrifice their existing investments or monthly contributions meant for achieving critical financial goals for making loan repayments.

Also Read: Dos and Don’ts of Personal Loan Prepayment

Personal Loan Foreclosure Procedure

The process of foreclosing a personal loan may slightly vary across lenders, but it generally involves the following steps:

• Review your loan agreement to check details on the lock-in period, foreclosure charges and any other specific conditions related to loan foreclosure.
• Submit a pre-closure request form or a written application along with any required documents.
• Request a statement of account that shows the outstanding balance, interest charged and any other charges that may be applicable.
• Make the payment for the outstanding amount and foreclosure charges that may be applicable.
• Sign or submit any documents required by the lender to process the closure.
• Collect an acknowledgment receipt for the amount paid.
• Wait for the lender to process the payment and issue a closure certificate.

Factors Affecting Your Personal Loan Interest Rates

While you apply for a personal loan, most of the banks, NBFCs and other lending institutions evaluate various factors that determine your personal loan interest rates. Understanding these factors shall help you avail personal loans at low interest rates with improved credit profile.

Credit Score

Your credit score is the most important factor that is considered by lending institutions before personal loan approval, as it displays your creditworthiness, repayment capacity and financial discipline. Your higher credit score depicts that you are financially responsible and demonstrates your ability to repay the loan in time. Maintain a credit score of 750+ to avail personal loan at low interest rates.

Income and Employment Stability

Lenders thoroughly assess your income levels and employment history while determining personal loan interest rates. This practice helps the lending banks, NBFCs and Fintech lenders in deciding on the personal loan interest rates, as a high-income level and stable job with a renowned company or organization helps in improving your eligibility resulting in enhanced chances of loan approval at low interest rates.

Loan Amount and Tenure

Larger loan amounts with longer repayment tenures can result in significantly high interest cost, as longer tenure means smaller EMI but higher interest cost. Shorter tenures reduce interest cost, but leads to higher EMIs. So, while applying for a personal loan, choosing the right loan amount and repayment tenure is key, to ensure the right balance between low interest cost and EMI affordability.

Relationship with the Lender

If you have a long-standing current or savings account or existing loan with the lending bank and maintain a healthy relationship by paying off all existing loans in time. The chances are that you might get a personal loan at lower or discounted interest rates.

External Factors

Several market and economic conditions and factors also influence your personal loan interest rates, such as inflation, recession, repo rate change, etc. Lender's varied interest rate policies related to lending products, investments, deposits and other financial products also influence the personal loan interest rates.

5 Common Myths About Personal Loans

Myth 1: Personal Loans Take Too Long to Process

Most prospective borrowers assume that personal loans involve lengthy approvals. In reality, they require minimal documentation and no collateral, making disbursals quick, often within 2-7 working days. Some lenders even offer same-day disbursal for its pre-approved customers.

Myth 2: Personal Loan Interest Rates Are Always High

The interest rates on personal loans depend on your credit profile. Those with good credit can get personal loans at rates usually starting from 10.50% p.a and those with a poor credit profile are likely to get a loan at higher interest rates. Since personal loans are unsecured - unlike car loans, home loans, or gold loans - the rates reflect the higher risk for lenders.

However, compared to other unsecured credit options like credit card loans or credit card EMIs, personal loans usually offer lower interest rates for borrowers with a similar credit profile.

Myth 3: Low Credit Score Means Instant Rejection

A higher credit score, preferably 750 or above, increases your chances of loan approval. Still, a lower score does not necessarily mean a simple rejection. Lenders also consider your income, job stability, employer profile, etc, before approving an application. However, a lower score may lead to higher interest rates.

Myth 4: Only Banks Offer Personal Loans

Borrowers assume that only banks provide personal loans. NBFCs and digital lenders also offer personal loans, often with easier eligibility, application process and faster approvals. However, they usually charge higher interest rates.

Myth 5: Existing Loans Mean No New Personal Loan

Having existing loans doesn’t mean application rejection. Lenders assess your repayment capacity using your EMI-to-NMI ratio (preferably within 50-55%). Thus, the borrowers having existing loans with adequate repayment capacity for a new loan should be eligible for it, provided they meet other eligibility criteria set by the lender.

Common Personal Loan Terms You Should Know

People Also Ask For

What is the maximum tenure for a personal loan?

Personal loan tenure usually ranges from 1 to 5 years. However, some lenders offer maximum loan tenure of 6-8 years.

What is reducing the rate of interest in personal loans?

Reducing rate of interest refers to a method wherein the interest is calculated on the outstanding loan balance each month. The EMI comprises both the interest on the current outstanding amount and a portion of the principal.

Can I avail personal loan and home loan at the same time?

Yes, you may avail personal loan and home loan at the same time, provided the lender of your second loan, which can be either is satisfied with your repayment capacity.

Which rate of interest is the best for a personal loan, floating or fixed?

Currently, most personal loans are offered at fixed rates as most of them have a relatively short tenure of up to 5 years.

Can I transfer my personal loan from one person to another?

No, a personal loan cannot be directly transferred from one person to another, as it is sanctioned on the basis of the borrower's credit profile. However, you may transfer the outstanding loan to another lender offering lower interest rates.

How to increase chances of getting a personal loan?

To increase the chances of personal loan approval ensure that you pay all your EMIs and credit card dues in time, check your credit report regularly for errors and maintain stable income and employment. You also need to choose the right loan amount and tenure, do not apply for loans simultaneously and maintain a healthy relationship with the bank to enhance the chances.

Can NRI apply for a personal loan?

Yes, Non-resident Indians (NRIs) can apply for personal loans from leading financial institutions. However, the eligibility criteria and documents required from lenders shall differ from those of resident Indians.

How does a personal loan affect credit score?

Personal loans can negatively or positively affect your credit score. If you pay your entire loan EMIs in time it shall positively impact your credit score. However, applying for personal loan can bring a dip in your credit score due to a ‘hard enquiry’ as termed by the Credit Bureaus. Personal loan further helps in building credit history and improves credit utilization making a positive impact on your credit score.

What is the EMI for a Rs. 2 lakh personal loan?

The EMI for a Rs. 2 lakh personal loan depends upon the offered interest rates, desired loan amount and repayment tenure. Assuming the personal loan rate of interest of 10.50% p.a. and loan tenure of 1 year the EMI for a Rs. 2 lakh personal loan shall be Rs. 17,630 and total interest payable shall be Rs. 11,557.

Can we stop personal loan EMIs for a few months?

Certainly, there are few lenders who offer ‘Temporary EMI Freeze’ or ‘EMI Moratorium’ service in which the borrower is given relief for not paying EMIs for a defined period. However, the interest continues to add on the outstanding loan amount.

What happens if personal loan EMI is not paid?

If due to any unforeseen circumstance, you are unable to pay your personal loan EMIs then you shall have to pay late payment charges, your credit score will be lowered, your loan becomes NPA (if not repaid within 90 days) and it becomes tough to get future credit products.

What are the documents required for a personal loan?

The basic documents required for a personal loan include Identity proof (Aadhaar card, Driving License, Voter ID, passport); Address Proof (Aadhaar card, Utility Bills, Passport, Driving license); Income Proof for Salaried (Latest 6 months' salary slips, last 3 months' bank statements, Form 16, ITR).

How to cancel personal loan after disbursement?

Yes, you can cancel your personal loan after disbursement but first you need to read all the terms and conditions of the loan agreement before signing. To cancel your personal loan you need to contact your lender immediately. Submit a written application stating to cancel your personal loan with immediate effect. Further, you need to pay the cancellation fees and adhere to the lender’s direction of submission of documents and returning the disbursed funds.

How much time it takes to disburse a personal loan?

Usually, it takes anywhere from a few hours to a few business days to disburse a personal loan. However, it depends on the lender’s policies, processes, and related timelines. However, if you are a pre-approved customer of a bank or NBFC then you can get instant approval with quick disbursals.

How to get personal loan without documents?

To get a personal loan without documents, you need to be a pre-approved customer of the bank or NBFCs. If not, you can still avail personal loan without documents but at higher interest rates by checking out for Instant personal loan apps, and search Fintech lenders and NBFCs offering personal loans without documents.

What is the EMI for a Rs. 10 lakh personal loan?

Let’s assume the rate of interest of 10.50% p.a. and loan tenure of 5 year. The Equated Monthly Instalment (EMI) for a Rs. 10 lakh personal loan shall be Rs. 21,494 and total interest payable will be Rs. 2,89,634.

Can I top up my personal loan?

Most lenders offer top-up personal loans to existing borrowers with a good repayment track record. The eligibility depends on factors like repayment history, income, and the lender’s policies.

Is GST applicable to personal loan EMI?

GST is not levied on the personal loan EMI amount. However, GST at 18% is applicable on loan-related charges such as processing fees, foreclosure charges and penal interest.

How to pay the HDFC Personal Loan EMI?

You can pay your HDFC Personal Loan EMI through ECS (Electronic Clearing Service) or by setting up standing instructions for automatic debit from your bank account on the due date.

How to calculate the processing fee for a personal loan?

The processing fee is calculated as a percentage of the sanctioned loan amount. For example, a 2% fee on a Rs 5 lakh loan would be Rs 10,000.

How to get a personal loan from SBI?

You can apply online via SBI’s website, mobile app, or by visiting a branch. Ensure you meet SBI’s personal loan eligibility criteria (income, credit score, documentation) and submit the required documents.

How to calculate EMI for a personal loan?

You can use online Personal Loan EMI calculators to easily calculate your EMI based on different loan amounts, interest rates, and tenures.

What happens if a personal loan EMI bounces?

If your EMI bounces, the lender may charge penalty fees, EMI bounce charges, or cheque bounce charges. Additionally, the default can be reported to credit bureaus, which may negatively impact your credit score.

Can a student apply for a personal loan?

Students can apply for personal loans only if they satisfy the various eligibility requirements related to age, income, credit score, etc. set by the lenders.

What are the best apps to apply for instant personal loans online?

Consumers can check instant loan offers straight away from the respective mobile apps of the bank/NBFC with which they have/had a banking relationship. Here we have listed best instant loan apps in India, which individuals can use to apply for instant personal loan online:

• Paisabazaar App
• YONO App from SBI
• Axis Mobile App
• IDFC First Bank
• Bajaj Finserv Experia App
• HDFC Loan Assist App

How can I apply for an instant personal loan online?

Many lenders offer pre-approved personal loans with instant disbursals to their select existing customers having good credit profiles. Thus, consumers should first check for such pre-approved offers with banks and NBFCs with whom they have an existing banking relationship.

After checking for pre-approved offers, visit online financial marketplaces to compare personal loan offers from various banks and NBFCs offering quick disbursals, preferably within the same day of making the loan application.

Can I get a personal loan if my salary is Rs. 12,000?

The minimum income requirements set for availing personal loans vary across lenders. While the minimum monthly salary requirements set by top lenders usually ranges between Rs. 15,000 and Rs 30,000, some lenders also offer personal loans to applicants having lower monthly income.

What Can a Personal Loan Be Used For?

Personal loans can be availed for any purpose, except for speculation or illegal activities. Borrowers can use the loan proceeds for covering medical emergencies, home renovation, wedding, vacation, business operations, etc. The loan can also be used for managing everyday expenses or for covering higher education costs (including courses not eligible for education loan) and for consolidating multiple high-interest debts.

Can I avail a personal loan without providing my salary slip?

Yes, you can avail a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as proof of income to fulfill the eligibility criteria. However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.

Can retired individuals apply for a personal loan in India?

Lenders offer personal loans to retired individuals in the form of pension loans. Just like personal loans, pension loan proceeds can be used for various personal financial needs like children’s marriage, home renovation, medical bills, etc. However, unlike personal loans, retirees can avail pension loans only from banks with which they maintain their pension accounts.

What to do if your personal loan application is rejected?

Your chances of loan approval may vary from one lender to another based on the varying credit risk assessment of the applicants and the internal credit risk policies of the lenders. On rejection of your personal loan application, first approach banks/NBFCs with whom you maintain your deposits, loans and/or credit card accounts as many lenders prefer to lend personal loans to their existing customers. Then, visit online financial marketplaces to compare the personal loan offers from other lenders and then, apply for the loan accordingly.

How to choose the right tenure for your personal loan?

Choosing the right tenure for your personal loan is crucial as it directly impacts your EMIs as well as the total interest cost of the loan. Note that your EMI decreases with the increase in the loan tenure and vice-versa whereas longer loan tenure results in higher total interest cost and vice-versa. Thus, opt for longer tenure only when you lack adequate repayment capacity after considering your monthly contributions for your unavoidable financial goals. Otherwise, opt for a shorter tenure.

Is it possible to close a personal loan early?

Yes, you can close your personal loan before the tenure of the loan ends. But you would need to pay pre-closure charges to the lender Bank or NBFC. Pre-closure charges vary lender to lender and is usually 2%-5% of the outstanding loan amount. Generally, the earlier you close your loan, higher the pre-closure charges. For instance, HDFC Bank charges 4% of the principal outstanding if you close the loan in the first 24 months, 3% of in case of 24-36 months and 2% if you close after paying 36 months of EMIs. Do note you also pay GST on the pre-closure charges.

Once you pay the pre-closure charges along with the full outstanding amount of the personal loan, ensure you get a no dues or loan closure certificate from the lender.