InvestorQ : Do business loans allow pre-closure of the loan?
ananya Sing made post

Do business loans allow pre-closure of the loan?

Anusha Savla answered.
3 years ago

Pre-closure of a loan is allowed but the time of your pre-closure varies from lender to lender. While some banks have a lock-in-period of six months to one year for the business loan. A few others allow you to pre-close the loan even after the first equated monthly instalment (EMI) has been paid.

Few lenders have a rule that a borrower can use only his/her personal funds to pre-close the loan and not use the balance transfer facility of another bank or lender.

Additionally, some banks allow pre-closure at no cost while some others charge an upfront fee of 2-5% of the pre-closed amount. Clarifications on this are to be sought from our business loan advisor during the processing of your application.

Thus, do ensure that while applying for the loan you do enquire about the loan pre-closure details. Do this to ensure that you are not in for a nasty shock when you do decide to close your loan before its tenure ends.