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Federal Bank Personal Loan Preclosure Charges

Federal Bank Personal Loan borrowers can pre-close their personal loans as per their repayment capacity. However, the borrowers should be aware of Federal Bank pre-closure charges and its pros and cons before making any prepayments. Note that, Federal Bank levies no preclosure charges on personal loans availed through Paisabazaar.com.
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Federal Bank Pre-closure Charges

For Floating Interest Rates NIL
For Fixed Interest Rates (excluding Byom Loans) Up to 3%
Federal Bank Preclosure charges for fixed rate personal loans availed through Paisabazaar.com NIL

Benefits of Pre-closing Personal Loan

Saving Interest Cost

Prepaying personal loans helps the borrowers to save their interest cost that they would have otherwise incurred during their loan tenure. For example, if an individual avails a personal loan of Rs 10 lakh at 13% p.a. for repayment tenures of 5 years, then his EMI would be Rs 22,753 and the total interest payable would be Rs 3.65 lakh. However, if he prepays the outstanding loan amount after a year, his savings on interest costs would be up to Rs 2.44 lakh.

Increased Eligibility for Additional Loans

Lenders usually offer personal loans to applicants whose EMI/NMI ratio is within 50-60% of their total monthly income, that includes their existing EMIs and EMIs of the proposed personal loan. Applicants exceeding this limit have lesser chances of getting their personal loans approved. Thus, applicants planning to avail additional loan facility can reduce their EMI/NMI ratio by prepaying their existing loans thereby improving their loan eligibility.

Lower Proportion of Unsecured Loan in Credit Mix

The ratio of secured and unsecured loan of an individual is referred to as credit mix. Federal Bank Personal Loans are unsecured loans. Thus, prepaying the personal loan will lower the proportion of unsecured loan in the credit mix. Increased proportion of secured loans would improve the credit score of the borrowers and increase their chances of getting loans in future.

Disadvantages of Pre-closing Personal Loan

Negative Impact on Liquidity

Many borrowers prepay their personal loans using their existing investments and emergency funds. Making prepayments using emergency funds might adversely impact the borrowers’ ability to deal with emergency situations like medical emergencies, loss of income due to job loss or any other financial exigencies.

Using existing investments might affect crucial financial goals of the borrowers. This might force the borrowers to avail loans at higher interest rates to fulfil their personal needs or any financial emergency. Therefore, the borrowers should make prepayments only if they have additional emergency funds. Personal loan borrowers can also reduce their repayment burden and interest cost by using personal loan balance transfer, i.e., by transferring their existing personal loans to other lenders at lower personal loan rate of interest.

Prepayment Charges

Federal Bank charges a prepayment fees of up to 3% for personal loans at fixed interest rates. Prepaying the personal loans also reduces overall interest cost savings. Therefore, the borrower should prepay personal loan only if their net savings in interest cost is sufficient enough after accounting the personal loan pre-closure charges.

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What our customers say

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I want to express my gratitude for your exceptional support & guidance throughout my loan application process to Aman (EW17239). Your professionalism & clear communication made the journey smooth and manageable. I appreciate how you helped during loan approval & fast-tracked the documentation. It is rare to find someone so committed to their clients. I truly value the effort you put into ensuring a successful outcome. Thanks again for your invaluable help.

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I’d like to express my sincere appreciation for Mr. Aman Kumar (EW32023) for the excellent assistance provided. His professionalism & willingness to help made the experience smooth & pleasant. Aman Kumar demonstrated patience & clarity while addressing queries and ensured that everything was handled efficiently. Such dedication & customer-focused service truly deserve recognition. Please convey my thanks and appreciation to him for his outstanding support.

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I really wants to appreciate Mohankumar Dhandapani for closing my loan requirement in such a short time and nice manner. He is very much approachable helped me based on my requirements. He explained me all the options in very short time even one option failed immediately helped me to get other options worked. Excellent job done by Mohankumar Dhandapani all the best keep you same way approachable you will get more customers. Thanks to Paisabazar too.

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DharmeshFeb 22, 2026

Committed support that made everything easy

I’d like to appreciate the Paisabazar team for the excellent loan service. I especially want to recognize one of your agents, Mr. Prince Kumar, for his outstanding support. For more than a month, he continuously followed up with me and assisted me. His commitment & professionalism made the experience smooth & hassle-free. I appreciate his efforts and dedication. Kindly acknowledge his performance and consider rewarding such a sincere employee.

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My Trust in Paisabazaar has Increased

I would like to take a moment to share my sincere feedback regarding the support I received from your team. The executive who assisted me was extremely professional, polite, and knowledgeable. They patiently understood my concern, explained the process clearly, and guided me step by step toward the right solution. I truly appreciate the transparency, timely responses, and genuine effort shown to help me.

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I contacted customer care with a few queries, and I am very satisfied with the support I received. The representative was polite, patient, and explained everything clearly. My questions were resolved properly, and the overall experience was smooth and helpful. Thank you for the excellent customer service

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Kokil BarnwalFeb 12, 2026

Easy loan approval with good guidance

Thank you for the support provided for getting personal loan approval. During this process I worked with Mr. Aman Bajpai (EW17239) who was co-ordinator for this entire process of Personal loan, I was incredibly impressed by his efficiency and problem-solving skills. He went out of their way to ensure all my questions were answered and that the disbursement timeline stayed on track. His coordination was really appreciable.

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Riyaj AtarFeb 9, 2026

Apne higher education ke liye loan liya tha

Muhje higher education ke liye loan chahiye tha. Paisabazaar pe apply kiya. Got it at the right time. Quite helpful.

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Puja DanuJan 22, 2026

Sabse jada helpful log the yaha

Maine bht jagah try kiya tha personal loan ka, yaha try kiya toh helpful log mille. Har steps mai aram se samjhaya or usse muhje loan lene mai jda dikkat nhi aayi.

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Anuradha GuptaJan 21, 2026
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