Home Loan foreclosure query

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nRiTeCh

nRiTeCh

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I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
 
Do you mean prepay the entire loan amount? You need to go to the bank to get your answers. Typically the banks don't hold your documents. They give them to 3rd party people for keeping in some warehouse.

You can pay off the entire outstanding balance through RTGS, NEFT or through cheque.

You can expect about 10-15 working days or less to get your original documents in hand and the bank will call you to get them. Some banks charge some percentage, or some fees for prepayment of loans, some don't.
 
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nRiTeCh said:
I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
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Foreclosure may affect your credit score.

Typically foreclosure charges are waived off after a time period depending on the duration of your loan. Have you checked your amortization schedule? The first few years of EMIs, the interest component may be more than the principle.
 
nRiTeCh said:
I have an ongoing home loan from Kotak bank since past 2 yerars.
Now, thinking of foreclosing the entire loan but have few queries before I proceed...

  • Are there any home loan foreclosure charges?
  • Whats the most common process for foreclosure or does it differs across bank?
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch?
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us?
Click to expand...
Had no issues with foreclosure with ICICI around 10 years ago. (a known person was SENIOR at that time)

1. There were minimal charges (in thousands compared to interest on loan, which was more then lakhs)
2. Yes, differs among banks.
3. Walk-in to branch always suggested.
4. Mine received within 1 month

Suggestion: Deal/Talk/Communicate with only 1 person as far as possible in branch, who has all authority for foreclosure.
 
Since past few years, RBI has issued guidelines that there should be no charges for foreclousure if the loan was taken for non-business purposes.
You should be able to pay the balance amount by netbanking post informing the bank about your intent to close the loan account. I believe the process is quite smooth these days
 
This is for icici, should be similar with Kotak, my answers are in line with ur qstns
nRiTeCh said:
  • Are there any home loan foreclosure charges? For home loans NO
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nRiTeCh said:
  • Whats the most common process for foreclosure or does it differs across Bank? It's very simple now a days, u need to fill a form regarding foreclosure and pay the amount may be by cheque or online thru RTGS and give its details along with the form. Your original docs will be fetched by bank and they will hand over them to you in a week or two.
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nRiTeCh said:
  • Can foreclosure payment be done online via netbanking/app or do we need to walk-in to the bank/branch? There are 2 options - Prepayment and Foreclosure, if ur online banking has the option, u can try, but since u want to foreclose, better approach the bank as u need to fill a form too. And I belive you can walk in to any branch, not just home branch where u have the loan a/c
  • When do they issue/submit us back all our original property related documents? And do we need to collect them in-=hand or do they courier us? Within 2 weeks, and in hand, as they are original property docs, better collect in person. Person on whom loan a/c is opened should be present
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I had closed my home loan from Axis a few years ago.

1. Check your loan TnC. After crossing certain amount of EMI or years there are no foreclosure charges.

2. Call your bank's loan department and get an appointment for closure. Carry a cheque, loan related papers and photo copy of your sale deed.

3. Not with axis. They had 2 options. Pay with a cheque or provide authorisation to debit the amount from your bank account. (Only if it's Axis)

4. They take about 7-10days to return the documents. You need to collect (carry photo copy to match them) in person along with no dues acknowledgement.
 
nRiTeCh said:
Just today someone here closed his home loan and he mentioned about pre-closure letter well whats that?
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Go thru my previous response.
For foreclosure, there will be a form to fill. May be that is called as letter.
Bank guy will provide it, just approach any Kotak bank branch with ur aadhar and pan copies and cheque. They will tell the pending amount. U shud be able to complete ur work in 10mins
 
Ok since we are on this- 'In pre-closure we still have to pay amount with full interest OR just the remaining principal amount?'
I am on getting a home loan this year so will let myself know all these stuff better.
 
DEVRAJ BARIA said:
'In pre-closure we still have to pay amount with full interest OR just the remaining principal amount?'
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Principle amount + some fees (if applicable).

If they charge you full interest then there's no point in pre-closure.
DEVRAJ BARIA said:
I am on getting a home loan this year so will let myself know all these stuff better.
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Me too, applied for loan approval last week and got approved this week. Bloody owner of the house took advantage of my offer amount and did deal with someone else. Now gotta look for homes again.
 
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enthusiast29 said:
Me too, applied for loan approval last week and got approved this week. Bloody owner of the house took advantage of my offer amount and did deal with someone else. Now gotta look for homes again.
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It's a typical Indian loot mentality. Same thing happened to me when I bought a flat in the same society where I was living on rent in a same flat for 3 yrs.

The house owner was a miserable lady who was nothing short of a beggar whose sole purpose was to only discuss money and how to increase rent in the shortest possible period giving end no. of lame chu excuses.

Even I played a game with her then... During covid I refused to pay her the so called 10% yearly hike in rent by telling how govt. has requested landlords not to hike rents etc. and how we are underpaid in our jobs due to covid situation. She kept mumbling and tried to defame us in society that we have eaten her money etc. When her chamcha chachis used to ask us, I used to reply if you care so much, why don't you pay the hike on my behalf to your dear poor friend!

The society chairman is a good friend of mine, who was my then neighbor and who is well-versed with that lady/her family. When the chairman is with me, who the hell do I have to worry about? We were warned by the committee members before opting for that lady's flat but back then we had no option but it seems they were right.

Then we seized this opportunity during the last covid yr and bought our own house and her khabris informed her and she was on 10000 C fire yelling from did you got the money etc. and what about my hike.. I said my parents are helping me with the flat and it's their decision not mine and yes parents were forcing a lot to buy our own property.

Also, her own son had mortgaged the same flat to a bank by taking here/ landlords fake signatures etc. Every month some or the other bank person used to come for inquiry. We were anyway living on the edge as you know banks can kick us out anytime by just giving a few days to vacate and the home opportunity happened just at the right time.

So I didn't pay her any excess rent during 2 yr of covid and when she kept giving excuses etc. for returning our deposit money the society stood by us and sent her an official notice and she returned the money after 2 months.

She didn't pay the excess electricity bill we paid before vacating the flat and she thinks its a huge win for her as if it was some 50 lacs lottery for not returning us around 500 bucks..now this as well she announced in the society. Poor lady...ok she won this time I admiti!

And just when we vacated the flat within 4 months bank came and sealed her flat! Now say?

The flat was on sale for a year and recently one society person himself bought it from the bank! Another huge loss for her...by her own son!

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I was browsing Kotaks F&Qs in my HOm loan login and here's what they state:

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So, it means I first need to write them, they then will issues me a foreclosure statement post which I need to get it singed by all borrowers and issue/submit a cheque with the amount!
 
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They will basically give you a final total due bill, with a stamp. This will be ~your total interest and principal on a 'specific date'. Cause when the month rolls over your total due changes. So pay the check before that date. Infact you can make the cheque couple thousand extra. You will get refund. Or make the cheque when you are at the branch. If it is a pre-fab cheque (from a machine), make it a bit extra. It's an easy process. So when your funds are ready. Go visit branch and get foreclosure statement. You can ask that as many times you want.
 
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Party Monger said:
You could have given them a call before making the thread man. lol
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Well I already called them last week and twice the cc person told me two different procedures hence the thread as mostly the procedure should be nearly identical in this case across banks and wanted to know the same..
asingh said:
They will basically give you a final total due bill, with a stamp. This will be ~your total interest and principal on a 'specific date'. Cause when the month rolls over your total due changes. So pay the check before that date. Infact you can make the cheque couple thousand extra. You will get refund. Or make the cheque when you are at the branch. If it is a pre-fab cheque (from a machine), make it a bit extra. It's an easy process. So when your funds are ready. Go visit branch and get foreclosure statement. You can ask that as many times you want.
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I have already signed a blank cheque and will input the amount in front of them once I visit them when I finally hear from them..
 
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Bank said they will calculate interest on remaining days and adjust the same in the Foreclosure statement post which I will have to pay the mentioned amount in one go.

Now whats this "interest on remaining days" means exactly?
 
enthusiast29 said:
Interest to be paid with your current month's EMI + principal amount of remaining component.
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I will confirm again as they said I need to pay interest on the balance days. IS it for the entire remaining loan tenure (10yrs) or this current months balance days before my next months emi date?
 
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