HDFC Auto Loan How to Avoid Foreclosure Fee?

Sobirvs

Sobirvs

Skilled
Hi everyone,

So I took a auto loan few months back and have more than enough to foreclose it. There was a condition I can’t foreclose it before 6 months which completed on 6th Mar’21.

My HDFC Rep told me few months back that he will get it done (though never in writing) but he is refusing it now. That’s fine, I don’t wanna argue with him, what I want is, is there a way to do it? The loan was for 4 years (to be on the safe side) but I am capable in foreclosing it within 6 months (which was on 6th March). Any of you guys knows the trick?

I have HDFC Credit card and HDFC Current Account with HDFC. I don’t think these 2 relationships will help me here.

Any tricks or suggestions?

Edit : Update : My problem is not 6 months, 6 months is over. It's been 6 months that I took the loan and final 6th month emi got deducted yesterday. Loan was for 4 years (to keep myself in safe side). But I knew I'll get the money within 6 months and still have much liquidity for myself and for my expenses for a year.... My problem is only with foreclosure fee, if someone knows how to close the loan without foreclosure fee. HDFC is adamant in taking that foreclosure fee which is alot (around 7.4% as they are claiming).
 
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I had foreclosed a HDFC auto loan couple of years back. Seems like the 6 months condition for foreclosing remains the same as couple of years back when I had foreclosed the loan. I'm not sure why they are refusing it for you if the 6 month's period is completed. Did you visit the HDFC bank loan center and submitted the request?
 
Sobirvs said:
Hi everyone,

So I took a auto loan few months back and have more than enough to foreclose it. There was a condition I can’t foreclose it before 6 months which completed on 6th Mar’21.

My HDFC Rep told me few months back that he will get it done (though never in writing) but he is refusing it now. That’s fine, I don’t wanna argue with him, what I want is, is there a way to do it? The loan was for 4 years (to be on the safe side) but I am capable in foreclosing it within 6 months (which was on 6th March). Any of you guys knows the trick?

I have HDFC Credit card and HDFC Current Account with HDFC. I don’t think these 2 relationships will help me here.

Any tricks or suggestions?
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There is no way to foreclose before 6 months if it is written in the terms and conditions/ loan agreement that you can’t. Banks have become even more evil now. They could at least allow with foreclosure fee but they don’t since the first 6 months is where you pay high amount of interest in terms of value and they don’t want to loose it. you can make an attempt to loansupport mail ID requesting for an exemption but its highly unlikely for car loan, home loan or personal loans. If you have business loans, then you have good chance of getting an exemotion.

the alternative for you is to invest that amount in FD or liquid mutual funds and earn 4-6% interest for those 6 months to minimize the net interest paid and foreclosure after 6months.
 
Check if it is possible to pay off a majority of the outstanding, leaving 3-6 EMI's. I have done this before without any foreclosure fees. But I dont know if this is possible within 6 months.
 
belictony said:
There is no way to foreclose before 6 months if it is written in the terms and conditions/ loan agreement that you can’t. Banks have become even more evil now. They could at least allow with foreclosure fee but they don’t since the first 6 months is where you pay high amount of interest in terms of value and they don’t want to loose it. you can make an attempt to loansupport mail ID requesting for an exemption but its highly unlikely for car loan, home loan or personal loans. If you have business loans, then you have good chance of getting an exemotion.

the alternative for you is to invest that amount in FD or liquid mutual funds and earn 4-6% interest for those 6 months to minimize the net interest paid and foreclosure after 6months.
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Good advice, invest in MF and get good returns.
 
mav2000 said:
Check if it is possible to pay off a majority of the outstanding, leaving 3-6 EMI's. I have done this before without any foreclosure fees. But I dont know if this is possible within 6 months.
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my problem is not 6 months. 6 months are over... today emi got deducted and 6 months waiting is over... my problem is ONLY foreclosure fee... if they can let me foreclose without the fee.

They seem adamant for foreclosure fee and won't waive off, it's about 7.4% foreclosure fee which is alot, it's probably around 67k.
sammy0x said:
Good advice, invest in MF and get good returns.
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I know, even FD might be good enough but I don't know, I like to keep myself debt free. Who knows , tomorrow emergency comes and I might spend that money of FD or mutual funds... If I can pay the loan and if emergency comes, I'll be fine thinking I don't have the money rather than putting myself in debt.
Chaos said:
You have to pay the foreclosure fee - no option.
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Yeah, I get that and I guess I might ultimately go for it, but just in case if I can get it waived or get it lowered.
technofast said:
I had foreclosed a HDFC auto loan couple of years back. Seems like the 6 months condition for foreclosing remains the same as couple of years back when I had foreclosed the loan. I'm not sure why they are refusing it for you if the 6 month's period is completed. Did you visit the HDFC bank loan center and submitted the request?
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They are not refusing, they said go ahead they can do it, but are asking 7.4% foreclosure fee. I want to get the foreclosure fee waived or lowered.
 
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It should be only 6% foreclosure charges within 1 year for vehicle loans. Not sure why it is 7.4%. Is it a commercial vehicle?
 
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I guess you are screwed. Best option is put your money in some FD and reduce your interest burden.
 
skoka123 said:
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That is really terrible. I had my auto loan with SBI and foreclosed it after 2.5 years, though SBI allows to foreclose after 6 months or 1 year. HDFC is known for some terrible policies and horrible customer care on many forums. Personal experience hasn't been great either.

Not sure if this can be done but check if you can transfer the loan account to some other bank like SBI and then foreclose it. There will be some transfer charges but shouldn't be close to the 6% that HDFC is asking for.
 
nRiTeCh said:
As for home loan are you referring specifically to hdfc here?
In Icici, one can foreclose home loan right in the second month itself.
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only in the past 5 years, home loans are more frequently given with zero fee foreclosure and part payment options. It depends on the time you are taking the loan., ex. promotional offers during festive season won't have this kind of fees and they promote it as a selling point. HDFC has this practise of auto loans and personal loas. When I took my car loan in 2018 from HDFC, they had this in the agreement and I tried to avoid this by taking loan from SBI. But SBI required for extra down payment compared to HDFC and I couldn't gather that extra money. So I went with HDFC as I was time bound and in my own mess right now. To mitigate excessive interest, I have paid 25% of principal outstanding on the day after my 12th EMI got debited. Now the interest and fee, I pay to foreclose is below the mutual funds market gain and hence I decided to invest in MF and not foreclosure with a fee.
 
xkcd0137 said:
Not sure if this can be done but check if you can transfer the loan account to some other bank like SBI and then foreclose it. There will be some transfer charges but shouldn't be close to the 6% that HDFC is asking for.
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Okay, transferring the loan means some other bank will pay HDFC their foreclosure fee and that bank then would want me to continue the loan right? Then I'll pay them interest and that bank would not want a loss I am guessing.
 
Sobirvs said:
Okay, transferring the loan means some other bank will pay HDFC their foreclosure fee and that bank then would want me to continue the loan right? Then I'll pay them interest and that bank would not want a loss I am guessing.
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As I said, I am not sure about that. You should contact the bank rep (sbi etc) and confirm about all the costs involved. If it works out, good for you.
 
i guess the point is read the fine print and the terms and conditions :)
Sobirvs said:
Okay, transferring the loan means some other bank will pay HDFC their foreclosure fee and that bank then would want me to continue the loan right? Then I'll pay them interest and that bank would not want a loss I am guessing.
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yup its pointless.
look,
no foreclosure before 6 months
foreclosure with charges after 6 months.

you signed up accordingly.
 
babhishek said:
i guess the point is read the fine print and the terms and conditions :)

yup its pointless.
look,
no foreclosure before 6 months
foreclosure with charges after 6 months.

you signed up accordingly.
Click to expand...
most of us know what we signed up for. But there is no harm in looking for waiver of those fees, other alternatives like investing in MF to reduce the net interest.
 
Sobirvs said:
Hi everyone,

So I took a auto loan few months back and have more than enough to foreclose it. There was a condition I can’t foreclose it before 6 months which completed on 6th Mar’21.

My HDFC Rep told me few months back that he will get it done (though never in writing) but he is refusing it now. That’s fine, I don’t wanna argue with him, what I want is, is there a way to do it? The loan was for 4 years (to be on the safe side) but I am capable in foreclosing it within 6 months (which was on 6th March). Any of you guys knows the trick?

I have HDFC Credit card and HDFC Current Account with HDFC. I don’t think these 2 relationships will help me here.

Any tricks or suggestions?

Edit : Update : My problem is not 6 months, 6 months is over. It's been 6 months that I took the loan and final 6th month emi got deducted yesterday. Loan was for 4 years (to keep myself in safe side). But I knew I'll get the money within 6 months and still have much liquidity for myself and for my expenses for a year.... My problem is only with foreclosure fee, if someone knows how to close the loan without foreclosure fee. HDFC is adamant in taking that foreclosure fee which is alot (around 7.4% as they are claiming).
Click to expand...
Just invest the extra funds you have in some mutual funds. Don't bother with the loan man. Save your time. Foreclosure is something loan sharks don't like. Make some interest in mutual funds to counter the interest you will pay on the loan ;)
 
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babhishek said:
i guess the point is read the fine print and the terms and conditions :)

yup its pointless.
look,
no foreclosure before 6 months
foreclosure with charges after 6 months.

you signed up accordingly.
Click to expand...
I'm not denying that, I know what I signed up for, and HDFC being a private bank, I am sure, they can negotiate. I am looking for a bargain, and heckling just might help a bit, but if not, I'll pay I guess, no other option..
Rockfella said:
Just invest the extra funds you have in some mutual funds. Don't bother with the loan man. Save your time. Foreclosure is something loan sharks don't like. Make some interest in mutual funds to counter the interest you will pay on the loan ;)
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I have already invested that money in FD, but I like to keep myself debt free always and I have the money and some surplus to keep my expenses going normally for about 1 year so wanna close loan to keep myself debt free for peace of my mind.
 
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