Loan Closing - Some doubts.

alabjarus · 10th September 2007, 17:12

Quote:

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.

/HKP

Last year I closed my Accent's loan with SCB. I negotiated the settlement to 2.5% against the 5% they quoted. Try that...it works. And, no....I did not commit any other business to SCB.

sushrutha · 10th September 2007, 17:29

Quote:

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

Hp cancellation, I got it done through an agent
Paid 500Rs for this. Mine was Jayanagar RTO

Lukeskywalker · 10th September 2007, 18:00

Quote:

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!)

You do not neccessarily have to bribe anyone to do the RTO paper work, it's quite simple, only you need to spend a max of half a day at the RTO.

Just submit the original RC along with the loan closure statement (photocopy) from the bank at the RTO, you will be issued a token acknowledgement after you pay the prescribed nominal fee . Typically you will get back your RC book in 2 or 3 days depending on their workload.

This is what I did to get the Hypothecation clause removed from my Dio's RC.

LLL · 10th September 2007, 18:18

Quote:

Originally Posted by 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.

Good to see that ABN AMRO has not learnt any lessons as yet. God bless them with many many customer losses....

On a serious note, how did they close the loan last month if there was still 5.93 remaining? Or if you pay 5.93 now, would it guarantee that there will not be a new charge on your closed account? Dont be surprised, this is ABN AMRO.

squarecut · 29th November 2007, 07:42

Lokesh G, your advice is very useful. The steps outlined by you are indeed what is required ( more or less) in most states.

There are people who do not take care to get these steps despite paying off the loan. Do not be so complacent, because loan giving banks may take advantage of your complacency, because the car remains in the ownership of the bank till RTO changes their records and your RC showing you as the owner. There were reports in TV, and I know people personally, who did not care to get the changes in their RC, and the bank ( private banks mostly) continued to take advantage of that.

In MP incidentally, the new RC is supposed to be delivered in a week's time.

InternetUser · 6th December 2007, 17:58

How much time does it take to receive the NOC documents from ICICI Bank after foreclosing the loan by check payment?

I still haven't received the NOC documents from ICICI Bank in spite of foreclosing the entire amount by check payment about a month ago! They say it needs to come from their head office directly and that it takes more time around the festival season.

It'd be helpful to know the amount of it took for other people.

nirmalts · 13th August 2008, 07:45

Quote:

Originally Posted by 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!

I plan to close my loan with ICICI. They are charging 5% + service tax as foreclosure charges. Any tips on how to bargain on this? Will the lady at the counter offer this? Do I have to talk to the manager?

Nirmal

mjothi · 13th August 2008, 08:17

Quote:

Originally Posted by nirmalts

I plan to close my loan with ICICI. They are charging 5% + service tax as foreclosure charges. Any tips on how to bargain on this? Will the lady at the counter offer this? Do I have to talk to the manager?

Nirmal

I doubt if you can negotiate. Btw, is this 5% mentioned in the fine prints when you got the loan? Or it just says at the prevaiing rate? If it has some lower number then it would help to negotiate, else difficult.

nirmalts · 13th August 2008, 09:01

Quote:

Originally Posted by mjothi

I doubt if you can negotiate. Btw, is this 5% mentioned in the fine prints when you got the loan? Or it just says at the prevaiing rate? If it has some lower number then it would help to negotiate, else difficult.

They mentioned that this is as per my loan agreement. Interestingly, I dont have a copy of loan agreement with me, other than the ammortization schedule :( I never got this. They are telling that I should have asked for this.

Nirmal

mjothi · 13th August 2008, 10:24

Quote:

Originally Posted by nirmalts

They mentioned that this is as per my loan agreement. Interestingly, I dont have a copy of loan agreement with me, other than the ammortization schedule :( I never got this. They are telling that I should have asked for this.
Nirmal

This is very usual with these guys. How the hell I know I am suppose to collect something, when I dont even know the name of the document. But its always safer to take xerox of all forms and stuff u get from these guys after signing and returning to them.
Ummm, Lets wait for our friends who had interaction with ICICI. Meanwhile, you can get hold of some Personal advisor or customer care executive to make sure you get all info you needed before going back to them.

musicmanaman · 13th August 2008, 10:32

Quote:

Originally Posted by InternetUser

How much time does it take to receive the NOC documents from ICICI Bank after foreclosing the loan by check payment?

I still haven't received the NOC documents from ICICI Bank in spite of foreclosing the entire amount by check payment about a month ago! They say it needs to come from their head office directly and that it takes more time around the festival season.

It'd be helpful to know the amount of it took for other people.

I received my NOC in 2 days, had to go to the bank to collect it though, but I guess it depends from branch to branch, the branch I went to was new, and they were trying to impress by showing how quick they were in satisfying customers.

shankar.balan · 13th August 2008, 10:48

I had foreclosed my loan (taken in 2005) with ICICI in March before buying my new car. The original agreement said I was to pay 4.49% Foreclosure Charges if this option was exercised.
However, from 2006 onwards apparently this foreclosure charge was increased to 5 or 6 %
Now since I was anyway going for a fresh loan for the new car, from the same bank, I managed to negotiate and get a waiver and thus paid only 1% foreclosure charge on my old loan. To get this consideration I had to fight with them daily for about a week, escalating the issue to the chief of the loans department in the city on account of my old relationship with their bank.

However I also had to pay stamp duty charges on my new loan because this goes direct to government.

As soon as the loan gets foreclosed one is given a receipt on the spot, which works perfectly well as proof when the vehicle is being transferred to the next owner etc. The actual NOC documents etc take typically a week to ten days to reach you at your address from the bank. It can be hurried up a bit if one puts pressure on the bank. And it is important to collect back one's initial security cheques as well - never forget to do that!
Just fyi

nirmalts · 13th August 2008, 14:29

Quote:

Originally Posted by InternetUser

How much time does it take to receive the NOC documents from ICICI Bank after foreclosing the loan by check payment?

3 days for cash payment, 5 days for cheque. I got mine in 3 days as I did cash payment

Nirmal

Zappo · 13th August 2008, 14:39

Guys here is a piece of advice. If you have a 3 years' car loan and it is already 1 year 8 months old or even more it does not make sense to foreclose the loan. The reason is that in all diminishing balance EMI based loans for the 1st half to three quarters of the duration of the loan all you keep paying is the interest. The principal amount reduces at a snail's pace. However after this period all of a sudden the interest payment shrinks very fast and its all principal that you are paying.

So when you have just say 1 year of your car loan left and you wish to foreclose you should remember that the bank has already charged you all the interest that it could charge (more or less) and now if you hurry to foreclose they will charge you another hefty foreclosure charge (say 5%) which only makes them unduly rich at your expense. You will find that often the 5% foreclosure charge on the remaining balance works out to be much much more than whatever interest payment was leftover.

csentil · 13th August 2008, 15:58

Very correct Zappo. If they are calculating that 5% pre-closure charge then it does not make any sense.

I had a loan with SBI. They didn't charge anything for pre-closure after 1y 6 months. So I closed it. A few thousands saved as interest.

29th November 2007, 07:42	#20
squarecut BHPian Join Date: Feb 2007 Location: Jabalpur Posts: 87 Thanked: Once	Lokesh G, your advice is very useful. The steps outlined by you are indeed what is required ( more or less) in most states. There are people who do not take care to get these steps despite paying off the loan. Do not be so complacent, because loan giving banks may take advantage of your complacency, because the car remains in the ownership of the bank till RTO changes their records and your RC showing you as the owner. There were reports in TV, and I know people personally, who did not care to get the changes in their RC, and the bank ( private banks mostly) continued to take advantage of that. In MP incidentally, the new RC is supposed to be delivered in a week's time. Last edited by squarecut : 29th November 2007 at 07:45.
	() Thanks

6th December 2007, 17:58	#21
InternetUser BHPian Join Date: Nov 2007 Location: Pune Posts: 46 Thanked: 3 Times	How much time does it take to receive the N.O.C. documents? How much time does it take to receive the NOC documents from ICICI Bank after foreclosing the loan by check payment? I still haven't received the NOC documents from ICICI Bank in spite of foreclosing the entire amount by check payment about a month ago! They say it needs to come from their head office directly and that it takes more time around the festival season. It'd be helpful to know the amount of it took for other people.
	() Thanks

13th August 2008, 10:48	#27
shankar.balan BANNED Join Date: Apr 2008 Location: Bangalore Posts: 11,368 Thanked: 23,147 Times View My Garage Infractions: 0/2 (8)	I had foreclosed my loan (taken in 2005) with ICICI in March before buying my new car. The original agreement said I was to pay 4.49% Foreclosure Charges if this option was exercised. However, from 2006 onwards apparently this foreclosure charge was increased to 5 or 6 % Now since I was anyway going for a fresh loan for the new car, from the same bank, I managed to negotiate and get a waiver and thus paid only 1% foreclosure charge on my old loan. To get this consideration I had to fight with them daily for about a week, escalating the issue to the chief of the loans department in the city on account of my old relationship with their bank. However I also had to pay stamp duty charges on my new loan because this goes direct to government. As soon as the loan gets foreclosed one is given a receipt on the spot, which works perfectly well as proof when the vehicle is being transferred to the next owner etc. The actual NOC documents etc take typically a week to ten days to reach you at your address from the bank. It can be hurried up a bit if one puts pressure on the bank. And it is important to collect back one's initial security cheques as well - never forget to do that! Just fyi Last edited by shankar.balan : 13th August 2008 at 10:50.
	() Thanks

13th August 2008, 14:39	#29
Zappo Team-BHP Support Join Date: Oct 2005 Location: Hyderabad Posts: 5,921 Thanked: 2,678 Times	Guys here is a piece of advice. If you have a 3 years' car loan and it is already 1 year 8 months old or even more it does not make sense to foreclose the loan. The reason is that in all diminishing balance EMI based loans for the 1st half to three quarters of the duration of the loan all you keep paying is the interest. The principal amount reduces at a snail's pace. However after this period all of a sudden the interest payment shrinks very fast and its all principal that you are paying. So when you have just say 1 year of your car loan left and you wish to foreclose you should remember that the bank has already charged you all the interest that it could charge (more or less) and now if you hurry to foreclose they will charge you another hefty foreclosure charge (say 5%) which only makes them unduly rich at your expense. You will find that often the 5% foreclosure charge on the remaining balance works out to be much much more than whatever interest payment was leftover.
	() Thanks

13th August 2008, 15:58	#30
csentil Senior - BHPian Join Date: Feb 2007 Location: Bangalore Posts: 1,349 Thanked: 38 Times View My Garage	Very correct Zappo. If they are calculating that 5% pre-closure charge then it does not make any sense. I had a loan with SBI. They didn't charge anything for pre-closure after 1y 6 months. So I closed it. A few thousands saved as interest.
	() Thanks