Foreclosure

Foreclosure means repaying a loan in full before its scheduled tenure ends, closing the account early. On floating-rate home loans to individual borrowers, RBI does not permit banks to levy foreclosure charges; fixed-rate loans and many non-home loans can still carry them. Foreclosing saves the future interest you would have paid, so it works best early in the tenure, when the interest share of each EMI (Equated Monthly Instalment) is highest. Weigh it against keeping an emergency fund intact. Always collect the no-dues certificate and confirm the lender has released its lien.