An Online Calculator To Help You Figure Out Your Personal Loan Foreclosure Situation
An Online Calculator To Help You Figure Out Your Personal Loan Foreclosure Situation
If you have taken out a loan, you must pay a monthly installment known as EMI (Equated Monthly Instalment). However, if you have the money to pay off the entire loan at once before the due date, you can do so. This process is called loan foreclosure. Loan foreclosure means paying back the whole loan balance early, which frees you from debt.
To decide whether to foreclose on a loan, you need to know how many EMIs you want to pay and which month you plan to pay off the loan. This article will help you understand the costs involved in loan foreclosure.
Using an Online Calculator
You can use an online calculator specifically designed to tell you how much money you will save on interest if you pay off your personal loan early. This type of calculator can show you how paying off your loan sooner will affect the length of your loan, your monthly payment, and other important factors.
What is a Foreclosure Calculator for a Personal Loan?
A foreclosure calculator helps you determine how much interest you will save and how much money you will owe if you decide to pay off your loan early. You can easily find and use this type of calculator online. It considers various factors, such as the total loan amount, how long it takes to pay it off, the interest rate, the monthly EMIs, and the month you plan to pay it off.
The foreclosure calculator: how to use it.
Calculating how much you need to repay when you foreclose on your loan is straightforward. A foreclosure calculator uses specific information to help you figure out how much money you owe and the interest you need to pay. Here are the details you will need to enter into the calculator:
The total amount borrowed and the current loan balance.
The repayment plan for your loan.
The interest rate on your loan.
The total amount you have already paid in EMIs.
The month you plan to foreclose.
Any fees or costs associated with taking back the loan.
What is Foreclosure Month?
Foreclosure month is the month when you choose to pay the entire loan amount after signing the agreement. For example, if you have a 7-year loan and decide to repay it after 1 year and 2 months, that specific month will be your foreclosure month.
Estimating foreclosures in an easy way
How do you calculate the amount you can foreclose on? There are helpful calculators available online that assist with mortgage prepayment and foreclosure. With a service like Piramal, the charges remain consistent, allowing you to know your loan balance and the interest due easily.
Here are the key details needed for the calculations:
Potential loan amount.
Length of the loan.
Interest rate on the loan.
Number of EMIs paid so far.
Foreclosure month.
Fees related to closing your loan.
Are there Penalty Charges Associated with the Foreclosure of a Loan?
When you decide to pay off your loan in full, you may have to pay a penalty fee, known as foreclosure charges. These charges usually range from 2% to 5% of the loan amount, plus any applicable taxes. Banks charge these penalties because they miss out on the interest income they would have earned had you continued to pay monthly.
Before deciding to foreclose on your loan, it's essential to check the amount of the prepayment penalty and evaluate your finances. This assessment will help you minimize the amount you end up paying.
If you have a home loan with a floating interest rate, you might not have to pay any foreclosure charges with Piramal Capital and Housing Finance.
Your Piramal Loan: How to Foreclose?
Here’s a simple guide to help you foreclose or pay off your Piramal house loan early:
First, inform Piramal Consumer House Finance (PCHF) or your relationship manager about your decision to pay off the loan early. They will adjust your loan terms and payment plan accordingly.
Next, prepare a list of your ID proofs (like Aadhaar card, PAN card, etc.) that you need to submit along with your loan application.
After notifying them, your relationship manager at PCHF will calculate the total amount you owe, including any interest and additional fees.
Then, you will be able to pay the amount using a check or Demand Draft.
Finally, after you pay the total, PCHF will send you a thank-you letter, along with a “No Due” certificate and a “No Objection” certificate.
The Bottom Line
By paying off your loan early, you can avoid a significant portion of the interest and EMIs you would have had to pay over time. However, remember that there may be a few fees when you choose to do this. Therefore, it’s wise to read the terms carefully before making a final decision to foreclose on your loan.