Housing Loan fore closure

Dear Sir,

Steps to Reduce the Foreclosure Burden Without Hurting CIBIL:
Ensure No Foreclosure Charges (for floating rate loans) — cite RBI/NHB circulars.

Request waiver of late payment fees, charges, or interest-on-interest.

Negotiate partial interest waiver based on your excellent repayment track record.

Explore balance transfer to another bank/NBFC offering a lower rate and zero foreclosure charges after takeover.

Ask for a restructured repayment plan if you are facing a temporary liquidity crunch — without it being marked as restructuring to CIBIL.

File a grievance with the Bank’s Nodal Officer / RBI Ombudsman, if they’re violating RBI guidelines.

Dear Client,
Loan foreclosure refers to the option that allows borrowers to repay their loan in full before the end of the loan tenure. Foreclosuer or settlement of any loan typically depens on the sole discretion of the Bank. Foreclosure of a loan can save your interest calculator, improve your credit score, and free up cash flow. The foreclosure amount is calculated as the sum of the outstanding principal amount, accrued interest, and any applicable charges. Banks can levy foreclosure charges on home loans, but as per RBI guidelines,(Ref. Circular No.DBOD. Dir.BC.No.110/13.03.00/2013-14 dated May 7, 2014), Banks will not levy foreclosure charges or prepayment penalties on home loans approved or sanctioned on a floating interest rate basis. Post-settlement/forclosure of a loan, the credit score is affected of a borrower, until and unless the CIBIL record is updated. You must obtain a No Objection Certificate (NOC)/No Dues Certificate(NDC) after settling your loans, which serves as proof of your cleared dues and can be beneficial for future loan applications and maintaining a good credit score. To remove or eliminate a "Settled" status from your CIBIL report after settlement of loans, an NOC or No Dues Certificate from the Bank/FI is essentially required for submission to CIBIL for updating your status. You must obtain a No Dues Certificate from the Bank post settlement of loans to apply CIBIL authority for updating your credit score. You can ask the Bank to update the CIBIL status post closure of loans, failing which you can escalate your grievance before the CIBIL Authority attaching all the documents. You can also raise your grievance against the Bank/lender to the regulatory authority RBI on the Digital Complaint Management System (CMS) Portal: https://cms.rbi.org.in/cms/IndexPage.aspx for a quick resolution in the matter.