HDFC Auto Loan How to Avoid Foreclosure Fee?

[princeoo7]

Foreclosing a loan also means your credit score will take a hit.

can you explain this ? also How to increase the credit score in general ? I was planning to take a auto loan and close it in next 6 to 8 months. I can do with 3 months but I think bajaj allows it after 3 months or so. will this affect my credit score ?

 

[psyph3r]

can you explain this ? also How to increase the credit score in general ? I was planning to take a auto loan and close it in next 6 to 8 months. I can do with 3 months but I think bajaj allows it after 3 months or so. will this affect my credit score ?

When you pay off all your dues before time, you're not considered a good enough bakra/credit/debt slave for the banks to profit from.

Impact of foreclosure on CIBIL score

How foreclosure of loan can negatively impact you cibil score. The reason of such negativity, preference of banks, why does it affect the score, etc.

www.loankuber.com

 

[icysmoke]

Damn. Never realized foreclosure could be so costly. 7.4-% is insane. If I assume that you are in a 30% tax bracket and you loan interest rate is around 8% then you would need a return of 11.3% on the investment. That is certainly not a very small number.

OP, thanks for asking this here. While it may not have been much help for you, it Will certainly warn others to tread carefully.

can you explain this ? also How to increase the credit score in general ? I was planning to take a auto loan and close it in next 6 to 8 months. I can do with 3 months but I think bajaj allows it after 3 months or so. will this affect my credit score ?

I would recommend you buy the car after 6-8 months. Unless it’s an absolute emergency of course. Such high pre-closure charges is bonkers.
The other advantage is that when you pay out of your savings, you are much less likely to opt for the avoidable upgrades like auto dimming IRVMs , leather seats, led DRLs and what not. When buying on loan, all these features seem like a must have.

 

[Rockfella]

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..


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.

FDs are giving peanut ROI these days but whatever rocks your boat man.

 

[Sobirvs]

Foreclosing a loan also means your credit score will take a hit.

as in a good way or bad? I mean paying something early isn't it a good thing?

FDs are giving peanut ROI these days but whatever rocks your boat man.

indusind giving 7% , MF I don't have any experience or knowledge abt and until I do my research I am not gonna trust anyone's word on whom and how to invest specially a banker, I know alot abt crypto but this money I have is not something I am ready to gamble with.

 

[Rockfella]

as in a good way or bad? I mean paying something early isn't it a good thing?

indusind giving 7% , MF I don't have any experience or knowledge abt and until I do my research I am not gonna trust anyone's word on whom and how to invest specially a banker, I know alot abt crypto but this money I have is not something I am ready to gamble with.

It is not a gamble but it is a minimum 7+ year game. YGPM for a query on bitcoin.

 

[skoka123]

as in a good way or bad? I mean paying something early isn't it a good thing?

I do not think there is a clear cut answer to how the CIBIL score mechanism works. I cannot believe that foreclosing in this case will affect your score. If the financial institution forecloses your loan as an NPA then it will definitely affect your score negatively. Some of the things that would affect your score negatively are the following.

1. Bouncing of checks
2. Missed EMI Payments
3. Loss of job / income (this the ratings agency knows by the salary that gets into your bank).
4. Too many enquiries for Credit Score raised by financial institutions on request of loans by you.

Impacting Positively

1. Increase in your credit limit
2. Low utilization of credit limit
3. Closure of Loans with regular payments (more the merrier) - All your Credit Card / Bajaj EMI Card loans are good way to build the credit score

Note: You can go to CIBIL website and get one free detailed Score per year. Do check all the entries including change of phone numbers, employer details, Loan details, payment details and other entries. You will be surprised to see how many details of you are already captured by these agencies. If you find any wrong entries contact CIIBL and the financial institution to get it corrected.

 

[Sobirvs]

It is not a gamble but it is a minimum 7+ year game. YGPM for a query on bitcoin.

naah, 7% 1 yr (close anytime.), PM , sure shoot.

I don't know if this will work or not but My sister works in HDFC at some other city/state and she said, just go to your loan branch, and say where is that xyz person I met yesterday who said I can get your foreclosure waived off (just bluff) and then someone will come and say, what was promised, and I just say, the guy said, open a 5L initial deposit savings account and I can get you your foreclosure waived off but I can't find that person anymore in the branch (still bluffing) and see the reaction and see if some staff can do that.

My sis said, this happened in her branch and foreclosure fee was waived off to someone.. is it a really possible in Delhi NCR?

I do not think there is a clear cut answer to how the CIBIL score mechanism works. I cannot believe that foreclosing in this case will affect your score. If the financial institution forecloses your loan as an NPA then it will definitely affect your score negatively. Some of the things that would affect your score negatively are the following.

1. Bouncing of checks
2. Missed EMI Payments
3. Loss of job / income (this the ratings agency knows by the salary that gets into your bank).
4. Too many enquiries for Credit Score raised by financial institutions on request of loans by you.

Impacting Positively

1. Increase in your credit limit
2. Low utilization of credit limit
3. Closure of Loans with regular payments (more the merrier) - All your Credit Card / Bajaj EMI Card loans are good way to build the credit score

Note: You can go to CIBIL website and get one free detailed Score per year. Do check all the entries including change of phone numbers, employer details, Loan details, payment details and other entries. You will be surprised to see how many details of you are already captured by these agencies. If you find any wrong entries contact CIIBL and the financial institution to get it corrected.

I am subscribed to CIBIL since last 3 yrs and only thing I see affecting my score is too many enquiries, however I have foreclosed a loan before (consumer durable) and it never had any impact. CIBIL works in mysterious ways lol.

 

[princeoo7]

naah, 7% 1 yr (close anytime.), PM , sure shoot.

I don't know if this will work or not but My sister works in HDFC at some other city/state and she said, just go to your loan branch, and say where is that xyz person I met yesterday who said I can get your foreclosure waived off (just bluff) and then someone will come and say, what was promised, and I just say, the guy said, open a 5L initial deposit savings account and I can get you your foreclosure waived off but I can't find that person anymore in the branch (still bluffing) and see the reaction and see if some staff can do that.

My sis said, this happened in her branch and foreclosure fee was waived off to someone.. is it a really possible in Delhi NCR?


I am subscribed to CIBIL since last 3 yrs and only thing I see affecting my score is too many enquiries, however I have foreclosed a loan before (consumer durable) and it never had any impact. CIBIL works in mysterious ways lol.

I have closed loan before for new loans and I think this affects the score in some way. Don't know for will try to see if bank is able to shade some light on the same or not. also who is the beauty in your dp wanted to ask for so long but never got the changes

 

[icysmoke]

Getting a new credit card affects the score negatively and closing a credit card also affects the score negatively. I can explain the reasons why but the larger point is that linear logic doesn’t apply here

 

[princeoo7]

Getting a new credit card affects the score negatively and closing a credit card also affects the score negatively. I can explain the reasons why but the larger point is that linear logic doesn’t apply here

linear logic left the room
also If I am suppose to take home loan, what is the best peroid I shall wait before closing if I get the amount arranged in near future ?

 

[Sobirvs]

I have closed loan before for new loans and I think this affects the score in some way. Don't know for will try to see if bank is able to shade some light on the same or not. also who is the beauty in your dp wanted to ask for so long but never got the changes

Hazel Crowney from MP3.

 

[icysmoke]

linear logic left the room
also If I am suppose to take home loan, what is the best peroid I shall wait before closing if I get the amount arranged in near future ?

No one can know the model for sure but if you are settling a home loan, taking a 20-30 point hit is definitely way better than paying 6-7% interest for a long time. Also, if you wouldnt need another major loan immediately, the cibil can typically recover in a couple of years with timely payments.

 

[princeoo7]

No one can know the model for sure but if you are settling a home loan, taking a 20-30 point hit is definitely way better than paying 6-7% interest for a long time. Also, if you wouldnt need another major loan immediately, the cibil can typically recover in a couple of years with timely payments.

recover in a couple of years mean after the loan was closed ? or is the time taken into consideration from the time emi starts.

 

[icysmoke]

recover in a couple of years mean after the loan was closed ? or is the time taken into consideration from the time emi starts.

After the loan, If you simply continue to make the regular payments on your credit cards etc and don't make many more enquiries, The score typically reaches 750+. Beyond 750, it is good enough.