Car Loan Closure Prepayment - Critical Points and Sample Letter

[sunandoghosh]

Hi friends,

I want to close my car loan prematurely and pay the balance off in one go now.

I need help for following aspects.

1. Could anyone pls share a sample letter which they would have used for pre closure of car loan in their case? The reason being I just want to make sure I cover all important points.

Also do i need to get this letter acknowledged when i go to bank and give them / handover physical cheque? Pls guide.

2. What other important points or steps i need to ensure are taken care of to make sure legally I am left with no further liability.

Pls share your expertise.
Thanks in advance for your help.

 

[350Z]

Welcome to The Automotive India, Sunando. From which bank the loan is taken? This depends because different banks would have different policies. Just contact the bank and place a pre-closure request. They should explain about the process in detail. Normally, after placing a pre-closure request, the pre-closure letter is issued with the information of credit due (including penalty) thereafter you are supposed to pay the amount and further finish the process.

Drive Safe,
350Z

 

[sunandoghosh]

thank you for sharing your advice. i took from axis bank.

 

[P3T3R]

Firstly do this:
Total up the following
-Down payment
-Total of the EMI's already paid
-One time final payment for loan closure
-Pre-payment or other charges
Call this figure X

Next:
Total up the following
-Down payment
-Total of the EMI's already paid
-Total of the pending EMI's
-Any other charges
Call this figure Y

Now Y minus X (call it Z) is the amount you save by pre-closing. Subtract the amount of interest you would have earned on the on time payment amount for duration of the loan from Z. Now see if the final saving is really worth it.

 

[threeace777]

sunando was it worth it ???