Personal Loan Foreclosure Charges by Bank (2026)
Closing a personal loan early usually costs 2–4.72% of the outstanding amount — but the charge varies sharply by lender, by how many EMIs you have paid, and by whether your loan is fixed or floating rate. This page compares the published foreclosure and part-prepayment charges of six major lenders, each verified against the lender's own fee schedule.
Foreclosure charges compared
| Lender | Foreclosure charge | Part-prepayment |
|---|---|---|
| HDFC BankPrivate | 2–4% of principal outstanding + GST (EMI-seasoning based) | Allowed after the first EMI; once per financial year and twice over the loan tenure, up to 25% of principal outstanding. Same seasoning-based charge slab applies. |
| SBIPSU | 3% on prepaid amount (Xpress Credit, fixed-rate) | Part-prepayment attracts the same 3% charge on the prepaid amount for fixed-rate loans. |
| ICICI BankPrivate | 3% + GST within 24 months; 0% after 24 months | Part-payment is available any number of times (per Jan 2026 service charge schedule). Charge: 3% + GST on the amount prepaid within 24 months of disbursal; NIL after 24 months. |
| Axis BankPrivate | NIL for loans ≥ ₹10 lakh (own funds, after 12 EMIs); 2–3% + GST for loans < ₹10 lakh | Part-prepayment permitted per product terms; charges mirror the foreclosure slab applicable at the time of prepayment — confirm in your sanction letter. |
| Kotak BankPrivate | 2–4% + GST on principal outstanding (tenure-based) | 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. |
| Bajaj FinanceNBFC | Up to 4.72% (incl. taxes) of outstanding on Term Loans; Flexi variants differ | Term Loan part-prepayment: up to 4.72% (incl. taxes) of the amount prepaid. Flexi Loan variants: part-payment any number of times at no charge. |
Verified against each lender's published fee schedule, July 2026. Always confirm against your sanction letter.
Bank-wise detail pages
The RBI rule that makes some foreclosures free
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.
Practical test: open your sanction letter. If the interest type says floating and the sanction/renewal date is on or after 1 January 2026, no lender — bank or NBFC — may charge you to prepay or foreclose. Fixed-rate loans (the majority of personal loans) follow the bank-specific charges above.
Frequently Asked Questions
Which bank has zero personal loan foreclosure charges?
Axis Bank currently levies no foreclosure or part-prepayment charge on personal loans per its published schedule. ICICI Bank charges 0% after 24 months of seasoning on loans disbursed from January 2026. All other major lenders charge 2–4.72% depending on when you close.
Are personal loan foreclosure charges banned by RBI?
Only partially. RBI's Pre-payment Charges on Loans Directions, 2025 prohibit prepayment charges on floating-rate loans to individuals for non-business purposes, for loans sanctioned or renewed on or after 1 January 2026. Most personal loans are fixed-rate, so bank foreclosure charges still apply to them.
Is it worth paying a foreclosure charge to close a personal loan?
Usually yes in the early years: compare the remaining interest you would pay against the charge plus GST. On a ₹3 lakh outstanding at 14% with 2 years left, you save roughly ₹46,000 of interest against a ₹14,000 charge. Near the end of tenure, the saving shrinks and foreclosure may not be worth it.
Do foreclosure charges apply to part-prepayment too?
Depends on the lender. HDFC Bank applies the same slab to part-prepayments, Kotak charges a flat ₹500 per instance, SBI charges 3% of the prepaid amount, Bajaj Finserv charges up to 4.72% on Term Loans but nothing on Flexi part-payments, and ICICI Bank does not allow part-prepayment at all on standard personal loans.
What documents do I get after foreclosing a personal loan?
Collect the loan closure letter and No Objection Certificate (NOC), and verify within 30–45 days that the account shows as closed on your CIBIL report. These protect you if the lender later claims dues.
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 each lender's published fee schedule and can change at the lender's discretion. This is not financial advice — confirm with your lender before acting.