Foreclosing a Gold Loan Early: What It Costs
By SonaFin Editorial Team · · 5 min read
In short: Foreclosing a gold loan means repaying it in full before the tenure ends. Some lenders charge no fee while others charge a foreclosure fee or a minimum-interest period, so check the terms before you close early.
What foreclosure means
Foreclosure is paying off the outstanding principal and interest before the scheduled end date to get your gold back early. People do this when they receive money sooner than expected or when they switch to a cheaper lender.
What it can cost
Some lenders allow closure at any time without a fee. Others charge a percentage of the amount prepaid, or require interest for a minimum period such as a few months. These terms differ between lenders and schemes.
What to check first
Ask for the exact payoff amount, any foreclosure fee and the minimum-interest rule in writing. If you are closing to switch lenders, compare the saving with the closing cost before you proceed.
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