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What is Foreclosure?

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0 2021-10-04T17:33:10+00:00
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If you have an outstanding home loan, then you are required to pay monthly Equated Monthly Instalment (EMI). If you receive a lump sum amount, then you can foreclose the existing housing loan to be free from debt. Now that you know what is foreclosure of loan, let’s read about the foreclosure process.

What is Foreclosure Process Submit an application and required documents

Visit the nearest branch of the financial institution or bank and submit an application for the foreclosure of your loan. You will also have to submit all the required documents, such as identity proof (Aadhar card, PAN card, etc.), bank statements as proof of the last EMI payment and clearance, loan account details, loan documents, etc.

Prepayment of the outstanding loan

After considering the interest and EMI paid so far as well as the applicable foreclosure charges and taxes, the NBFI/bank will calculate the balance loan amount to be paid and communicate the same to you. Then, you will be required to pay the outstanding dues through demand draft, cheque, or online transfer in the form of RTGS or NEFT.

Receipt of documents

After that, the financial institution or bank will begin the foreclosure formalities which includes stopping all EMI reminders and instructions, returning all original documents within 10-15 business days, and providing these documents:

  • Loan closure certificate.

  • No Objection Certificate to close the personal loan

  • No dues certificate

  • Pre closure payment receipt

  • Acknowledgment letter

I hope you like my answer on what is foreclosure meaning.

I think you might like these answers as well:

How to reduce EMI of existing home loan? How to repay home loan faster? How to close home loan early?

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