Is it a good idea to preclose a ICICI Bank Personal Loan with 5% penalty ?

POSTED BY uss1003 ON May 14, 2014 3:18 pm COMMENTS (3)

Hi,

I have personal loan with ICICI Bank for 15.5% roi and emi ends in Jul’15.  I have some funds in hand and thinking to pre-close the loan for which they are charging 5% penalty.

Please advise if this is good to pre-close the loan or invest the available funds in FD’s/MF’s.  I am looking for safe and conventional source of income and easy to withdraw on requirement.

Regards

Sarma US

 

 

3 replies on this article “Is it a good idea to preclose a ICICI Bank Personal Loan with 5% penalty ?”

  1. ashalanshu says:

    Dear Sarma, if you opt to repay the loan, how can you liquidate the same amount in case of any need?

    Thanks

    Ashal

  2. uss1003 says:

    Thank you Raja. The loan is taken for fixed rate of interest

  3. Raja says:

    If this is a floating interest rate personal loan, ICICI bank cannot charge any penalty on pre-closure now. Just last week RBI has come out with a notification that banks cannot levy any penalty for pre-payment or foreclosure of any kind of floating term loans. Give a copy of that notification to ICICI for their reference.

    https://rbi.org.in/scripts/NotificationUser.aspx?Id=8868&Mode=0

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