Loan Closing - Some doubts.

[HKP]

My Car loan from Standard chartered is going to get over in Jan 2008, But I am planning to close it by paying up. I will have to pay 5% extra as charges is what they have told me. The amount is not very huge in total and I have decided to do that. Std.Chartered has discontinued Car Loan product it seems so negotiating future loans etc are not applicable.

I am eager to know,

1.What are all the paperwork involved in this
2 What are this things to take care.
3.The RC book will need to be updated, for that what needs to be done?

Please let me know what are all the things I should take care while doing this. I searched through this forum but I could not find much info on this. If anyone has done this please let me know your experience.

Thanks

/HKP

[vkochar]

I got my loan closed on a Santro a year before it actually ended. I do not know how much interest extra I paid but yes it was around the 5% mark.

What you need to do is - pay them all the amount, and at the same time they will give you all your cheques back. Also you will get a NOC from them stating that you have paid the due amount and there is no loan on the car from now on. A copy of the NPC is to be given to the Bank for their records. Thats it.

I do not recall them doing anything on my RC.

[sushrutha]

Originally Posted by vkochar

interest extra I paid but yes it was around the 5% mark.

What you need to do is - pay them all the amount, and at the same time they will give you all your cheques back. Also you will get a NOC from them stating that you have paid the due amount and there is no loan on the car from now on. A copy of the NPC is to be given to the Bank for their records. Thats it.

Absolutely right
I recently closed my Zen's loan. Damn.. ICICI charged me 5.62% on my outstanding principal
Pay the amount thru cheque. Get a receipt.
Once the cheque is cleared, take a letter from bank stating that so & so loan amount has been paid n the nothing pending.
2 letters are issued, one for the RTO other for the Insurance company.
Also get the loan closure statement details.(keep this with u for records)
Submit the letters to the RTO (Keep bank xerox copies of the letters with you).

All your cheques will be delivered within 7 -10 working days.

Hope this helps

[anonymous]

Originally Posted by sushrutha

Absolutely right
I recently closed my Zen's loan. Damn.. ICICI charged me 5.62% on my outstanding principal
Pay the amount thru cheque. Get a receipt.
Once the cheque is cleared, take a letter from bank stating that so & so loan amount has been paid n the nothing pending.
2 letters are issued, one for the RTO other for the Insurance company.
Also get the loan closure statement details.(keep this with u for records)
Submit the letters to the RTO (Keep bank xerox copies of the letters with you).

All your cheques will be delivered within 7 -10 working days.

Hope this helps

I also recently got my car loan closed but in a different way.
I got a call from ICICI offering for Car over draft facility. I was told some very fancy and attractive schemes, so I opted for this. They did valuation check of my car and opened a new current account. From this account, they settled my car loan and since all this happened within the bank, there was no extra charge for this. Later on I came to know that whatever I was told initially, is absolutely wrong, so I went ahead and paid the entire amount in one go and closed of the account.

[LokeshG]

Originally Posted by HKP

My Car loan from Standard chartered is going to get over in Jan 2008, But I am planning to close it by paying up. I will have to pay 5% extra as charges is what they have told me. The amount is not very huge in total and I have decided to do that. Std.Chartered has discontinued Car Loan product it seems so negotiating future loans etc are not applicable.

I am eager to know,

1.What are all the paperwork involved in this
2 What are this things to take care.
3.The RC book will need to be updated, for that what needs to be done?

Please let me know what are all the things I should take care while doing this. I searched through this forum but I could not find much info on this. If anyone has done this please let me know your experience.

Thanks

/HKP

AFAIK the following paperwork/action is required.
1) "No Objection Certificate" OR 'No Claim Certificate" from the financer/bank.

2) Form 35 (in Delhi, may be different in your city) which is "Notice of Termination of an Agreement of the Hypothecation". This is in duplicate. Submit one copy to the Registering Authority for removal of HP in the RC and submit the other copy to the Insurance company for removal of HP in the policy.

3) Collect back all the balance cheques. In case of 'Electronic Clearing', submit a copy of the NOC to your banker and instruct them to stop further withdrawals by the financer.

Only care required is: Check all the papers carefully and keep photocopy of all the documents/forms, etc. for your records.

All best!

[anonymous]

Originally Posted by HKP

My Car loan from Standard chartered is going to get over in Jan 2008, But I am planning to close it by paying up. I will have to pay 5% extra as charges is what they have told me. The amount is not very huge in total and I have decided to do that. Std.Chartered has discontinued Car Loan product it seems so negotiating future loans etc are not applicable.

I am eager to know,

1.What are all the paperwork involved in this
2 What are this things to take care.
3.The RC book will need to be updated, for that what needs to be done?

Please let me know what are all the things I should take care while doing this. I searched through this forum but I could not find much info on this. If anyone has done this please let me know your experience.

Thanks

/HKP

Normally with most of the banks, if you pay your EMIs on time for a pre defined duration and than decide to pre close it, there is no extra change. Please confirm it with your bank and also talk to them about what all docs are required for this. After this, you need to visit the bank personally to get this loan account closed. As far as RC Book is concerned, I am not sure if it needs to be updated, as there is nothing mentioned on your RC about your loan but I am be wrong here.

[LokeshG]

Originally Posted by rlather

I also recently got my car loan closed but in a different way.
I got a call from ICICI offering for Car over draft facility. I was told some very fancy and attractive schemes, so I opted for this. They did valuation check of my car and opened a new current account. From this account, they settled my car loan and since all this happened within the bank, there was no extra charge for this. Later on I came to know that whatever I was told initially, is absolutely wrong, so I went ahead and paid the entire amount in one go and closed of the account.

Sad....but this is true. These banks lure the customers with attractive schemes and later on deny. One should insist on having their proposal on such schemes in writing, which I guess they would never do.

[nikkibike]

Try to foreclose it without paying anything extra. They will waive the foreclosure amount if you negotiate badly. Good to know that you are going to take 'real posession' of the car!

Good that you are free from that OD gimmik! Many have fallen in that trap!

[GTO]

I fore-closed a loan in 2004 and bargained on the 5% surcharge. They got it down to 3.5%.

StanChart burnt their fingers with bad loans!

[LokeshG]

Originally Posted by rlather

Normally with most of the banks, if you pay your EMIs on time for a pre defined duration and than decide to pre close it, there is no extra change. Please confirm it with your bank and also talk to them about what all docs are required for this. After this, you need to visit the bank personally to get this loan account closed. As far as RC Book is concerned, I am not sure if it needs to be updated, as there is nothing mentioned on your RC about your loan but I am be wrong here.

There is nothing mentioned about the loan on the RC but the name of the financer/bank is definitely recorded on it. Only after you submit the 'NOC' from the financer along with 'Notice of Termination of Lease/HP' to the Registration Authority, it is removed and you become the actual and lone owner of the vehicle.

[gkrishn]

Tell me about this wavier thing. My loan got closed last month. And last week i got a letter from ABN amro for residual 5.93Rs to be paid yet... pending which they will issue NOC and all that.

[HKP]

Thanks for all the suggestions.

I am somewhat clear about the Bank formalities now. But Some of you have not done anything to RC book? How can this be? In my RC book the Bank name is clearly mentioned.

Any Idea in Bangalore, How do I go about changing this from RTO? Mine is KA 03, Indiranagar. How much It will cost (Including bribes of course!)

/HKP

[Neel]

typically some loans can be preclosed after 1 year. In my case i could pre-close upto 25%of the amount (outstanding or in some cases the original amount).

In your case, the loan is anyway going to close in Jay 08 and i presume you must have got a good deal on the interest rates (3-4 years ago) compared to the current ones. I am assuming it is not a 1 year loan and most of your interest has already been paid off.

If you plan to stay with your current car till Jan 08 and possibly later, i would reccomend you park you money elsewhere and close your loan in Jan without any penalties.

-Neel

[LokeshG]

Originally Posted by HKP

Thanks for all the suggestions.

I am somewhat clear about the Bank formalities now. But Some of you have not done anything to RC book? How can this be? In my RC book the Bank name is clearly mentioned.

Any Idea in Bangalore, How do I go about changing this from RTO? Mine is KA 03, Indiranagar. How much It will cost (Including bribes of course!)

/HKP

Pls see my replies in respect to RC issue.

[LokeshG]

For RC:

You have to submit the following documents to the RTO:
1) NOC from the bank
2) Form 35 signed by the bank
3) PUC Certificate
4) Original RC with your bank's name on it.
5) Any other, as per their requirement and varies from State to State, I think so.

As far as all your documents are complete and in order, there is no need to pay any bribe. Simply deposit the papers along with the fee. You will get a receipt hand-to-hand. The new RC, with HP removed, will be delivered in due course. In Delhi it takes 30-45 days. But the receipt which you will get is as good as the RC, in the absence of the original one.
Hope this will help!