Kotak Mahindra Bank Personal Loan Foreclosure Charges (2026)
Kotak Mahindra Bank charges 4% + GST of the outstanding principal to foreclose a personal loan within 3 years of disbursal, and 2% + GST after that. Part-prepayment carries a flat ₹500 + GST per instance. Here is the tier structure, the lock-in, and how the RBI's 2026 floating-rate rule interacts with it.
Kotak Bank personal loan foreclosure charges at a glance
| Foreclosure charge | 2–4% + GST on principal outstanding (tenure-based) |
|---|---|
| Part-prepayment | Part-payment charge mirrors the foreclosure slab: 4% + taxes if within 3 years of disbursal; 2% + taxes if after 3 years. Capped at 20% of the outstanding principal per request, once per financial year. |
| Lock-in / when allowed | No lock-in period — foreclosure and part-payment are permitted after the very first EMI. |
| Official fee schedule | Kotak Mahindra Bank — Personal Loan (Fees & Charges) · verified 2026-07-04 |
Charge breakdown
- 4% + GST if foreclosed within 3 years of disbursal
- 2% + GST if foreclosed after 3 years
The RBI 2026 rule: when foreclosure is free by law[RBI Directions 2025]
RBI (Pre-payment Charges on Loans) Directions, 2025: no pre-payment/foreclosure charges on floating-rate loans to individuals for non-business purposes, for loans sanctioned or renewed on or after 1 January 2026. Fixed-rate personal loans remain outside this protection — bank-specific charges apply.
Check your sanction letter: if your Kotak Bank personal loan is floating-rate and was sanctioned or renewed on or after 1 January 2026, the bank cannot charge you anything to prepay or foreclose it. The charges on this page apply to fixed-rate loans — which most personal loans are.
How to foreclose a Kotak Bank personal loan
Raise a closure request via Kotak app/net banking or branch, pay outstanding + charge, obtain NOC.
Is foreclosing worth it after the charge?
Compare the remaining interest you would pay by continuing EMIs against the foreclosure charge + GST payable today. Remaining interest = (EMI × months left) − principal outstanding. If the interest saved exceeds the charge, foreclosing saves money.
Worked example
₹3,00,000 outstanding at 14% with 24 EMIs left ≈ ₹46,000 future interest. A 4% + GST foreclosure charge costs ≈ ₹14,160.
Net saving from foreclosing today ≈ ₹46,000 − ₹14,160 = ₹31,840 — foreclosure wins comfortably. The closer you are to the end of tenure, the smaller the interest saving, so re-run the numbers before paying the charge.
Related tools & guides
Sources & References
Legal basis: RBI (Pre-payment Charges on Loans) Directions, 2025 (issued 2 July 2025, applicable to loans sanctioned or renewed on or after 1 January 2026); individual bank fee schedules as published.
Official sources
Last verified against official sources: July 2026. Figures are researched from the government sources above and checked before publishing. See our Editorial & Verification Policy.
This page is for informational and educational purposes only. Charges are researched from the lender's published fee schedule and can change at the lender's discretion — always confirm against your sanction letter and the bank's current schedule before acting. This is not financial advice.
Frequently Asked Questions
What is the Kotak personal loan foreclosure charge in 2026?
4% + GST on the outstanding principal if foreclosed within 3 years of disbursal, and 2% + GST after 3 years, per the published schedule.
What does Kotak charge for part-prepayment?
A flat ₹500 + GST per instance of part-payment, per the published schedule.
When can I foreclose a Kotak personal loan?
Generally after 12 EMIs — confirm the exact lock-in in your sanction terms. Raise the request via the Kotak app, net banking, or a branch.
Is Kotak personal loan foreclosure free under RBI rules?
Only for floating-rate personal loans sanctioned or renewed on or after 1 January 2026. Fixed-rate loans — the majority — follow Kotak's published charges.