Personal loan foreclosure charges in India, bank by bank

Closing a personal loan early costs money, and the amount depends on the lender, on how long the loan has been running, and on whether the quoted percentage already includes tax. Those three variables move the number by a factor of two or more on the same balance.

This page collects what the market publishes, dated 2026-09-03. Every per-bank figure here is marked with its source type, and the aggregator-sourced ones carry a real risk of being stale, because Indian bank fee schedules are frequently rendered client-side or served only as a PDF. The lender’s own Most Important Terms and Conditions is the document that governs. The personal loan balance transfer calculator takes these as inputs rather than assuming any one of them.

Foreclosure charges and lock-ins

Two patterns run through the table.

The charge usually falls with loan age. HDFC’s 4%, 3%, 2% ladder is the clearest example. The logic is the lender recovering acquisition cost, and the practical effect is that a loan foreclosed just after the lock-in ends is the most expensive one to move. On a ₹6 lakh balance the difference between HDFC’s month-18 tier and its month-40 tier is ₹12,000 before GST.

A lock-in usually applies. Twelve EMIs is the common figure, and it is the first thing to check, since a transfer inside the lock-in is not a question of arithmetic at all. Kotak’s stated position, foreclosure permitted after the first EMI, is the outlier in this set.

The IDFC FIRST zero-foreclosure claim needs reading narrowly. It is promotional copy about one product, FIRSTmoney, and does not generalise to every IDFC FIRST personal loan. A borrower relying on it would want the sanction letter to say so.

The GST quoting trap

GST at 18% applies to a foreclosure charge and to a processing fee, because both are consideration for a service rather than interest. Interest itself is exempt.

The complication is disclosure style. Most lenders quote exclusive: “3% plus GST”. Bajaj Finance is reported to quote inclusive: “up to 4.72% of outstanding, inclusive of taxes”, which is 4.00% grossed up by 18%.

Read as if they were the same basis, the two are 57% apart in one direction and 18% off in the other. On ₹6,00,000 outstanding:

The third row is the error: treating an inclusive quote as exclusive and adding tax a second time. The calculator on this site carries an explicit inclusive-or-exclusive switch for this reason, and reports the base charge and the tax on separate lines so the two can be checked against the sanction letter.

Processing fees at the incoming lender

Market range across lenders: 1% to 3% plus 18% GST, plus documentation and stamp charges commonly ₹2,000 to ₹5,000.

HDFC’s flat ₹6,500 is worth isolating, because a flat fee behaves in the opposite direction to a percentage. On a ₹2 lakh transfer it is 3.25%, more than most percentage quotes. On a ₹15 lakh transfer it is 0.43%, far less than any of them. A comparison that assumes every fee is a percentage will misprice both ends.

What the two sides add up to

The full cost of moving a personal loan is the exit plus the entry, both grossed up for tax:

foreclosure on outstanding, plus GST
+ processing fee at the new lender, plus GST
+ documentation and stamp charges
= total cash out

On the market ranges that is roughly 4% to 8% of the outstanding principal, sometimes more where an old loan sits in a high foreclosure tier and the new lender charges 2% to 3%.

Set against that, the interest still recoverable on a short tail is often 2% to 3% of principal. This is why a personal loan transfer with under about 18 months left rarely clears its costs even at a large rate gap, worked through in full on when a personal loan transfer pays.

Why the RBI 2026 rule leaves this table standing

The RBI (Pre-payment Charges on Loans) Directions, 2025 have been widely reported as ending foreclosure charges from 1 January 2026. Two limits in the instrument keep this table intact.

The Directions apply to floating-rate loans. Indian retail personal loans are almost universally fixed-rate. The lender’s board-approved foreclosure policy continues to govern them.

They apply only to loans sanctioned or renewed on or after 1 January 2026. A loan being foreclosed in 2026, having been taken in 2023 or 2024, is outside the effective date whatever its rate type.

Where the rule does reach, it is emphatic: no pre-payment charges on floating-rate loans to individuals for non-business purposes, irrespective of the source of funds, in part or in full, and without any minimum lock-in period. That last clause removes the 12-EMI lock-in for the loans it covers. The scope, including the ₹50 lakh threshold on the business branch, is set out on the RBI prepayment rules page.

The practical reading for a personal loan borrower in 2026: the charge on the loan being closed is whatever the sanction letter says, and the rule matters mainly for what the next loan will cost to leave, if that one is floating-rate and sanctioned from 2026 onward.

Checking the number before committing

Three documents settle it. The sanction letter and loan agreement state the pre-payment terms for the specific loan, and under the 2025 Directions a charge not disclosed as specified cannot be levied. The lender’s current Most Important Terms and Conditions or fees schedule states the tier and the basis. And a foreclosure statement requested from the lender gives the actual rupee figure on the actual outstanding as at a stated date, which is the only number that belongs in a transfer calculation.

Where the cash exists, part-prepayment is worth pricing against a full transfer before either is committed to, and where card balances are also in the picture, the debt consolidation calculator compares the routes together.