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Loan amount
Tenure
Tenure
Rate of interest
%
Foreclosure Charges
%
Months of Foreclosure
Months of Foreclosure

Foreclosure Amount

EMI Amount

.

Total Payment

Principal + Interest

Outstanding principal at the time of foreclosure

Disclaimer: The aforementioned values, calculations and results are for illustrative and informational purposes only and may vary basis various parameters laid down by Tata Capital.

What is Business Loan Foreclosure?

When you take a business loan, your lender charges you interest on the loan amount as per an agreed-upon business loan interest rate. You’re required to pay your principal amount along with this interest in Equated Monthly Instalments or EMIs. However, if you have surplus funds, you can even choose to repay the entire loan amount in one shot instead of paying EMIs over a long period.

This process of making the full repayment of your outstanding business loan amount before the end of the scheduled EMI period or tenure is known as business loan foreclosure. It can happen only if you have enough surplus funds to repay your entire loan amount. A business loan foreclosure calculator can help you calculate the amount that you need to pay to foreclose your business loan.

What is a Business Loan Foreclosure Calculator?

If you have the required funds, you can decide to foreclose your business loan before the completion of its tenure. Foreclosing a business loan allows you to save on your interest outgo and remove the hassles of paying an EMI every month. However, when you choose to foreclose your business loan, you may have to pay a nominal foreclosure charge to the lender.

A business loan foreclosure calculator can help you determine the foreclosure amount for your business loan based on the foreclosure charges charged by your lender. You can also calculate the interest amount you can save by choosing to foreclose your business loan. With Tata Capital’s business loan Foreclosure calculator, you can calculate your business loan foreclosure amount and your savings in the simplest manner.

What is Foreclosure Month?

The foreclosure month refers to the month in which you foreclose your business loan before the due date. For instance, if you have a loan term of 60 months but decide to foreclose your loan prematurely in the 40th month, the 40th month will be termed as the foreclosure month.

Penalty Charges for Foreclosing a Loan?

Foreclosing a loan can result in some additional charges. Here’s the list of penalty charges you would have to pay if you foreclose a loan before the due date:

  • 4.5% of the outstanding principal on the existing business loan, along with applicable taxes

  • If you foreclose the business loan within the first nine months of the loan term, you will pay a penalty of 6.5% of the outstanding principal on the existing loan, along with applicable taxes
     

The foreclosure charges differ for a top-up business loan. Here’s the penalty charge you would have to pay if you foreclose a top-up loan before the due date:

  • 2.25% on the outstanding principal on the existing loan, along with applicable GST (Goods and Services Tax). An important thing to note here is that foreclosure charges are only levied if the new interest rate is lower than the existing rate.
     

The foreclosure charges in CCOD cases are as follows:

  • 4.5% on the dropped-down limit amount, along with applicable taxes
  • If you foreclose the loan within the first nine months of the loan term, you will pay a penalty of 6.5% of the outstanding principal on the existing loan, along with applicable taxes
     

In addition to the above, you will also pay a foreclosure letter charge of Rs 99 + GST for branch walk-ins.

You can use a loan foreclosure calculator to understand how these charges will impact you. The foreclosure calculator is an easy-to-use tool that can display accurate results in a few seconds and help you make informed decisions about foreclosing your business loan.

How to Use a Business Loan Foreclosure Calculator?

Using a business loan foreclosure calculator is incredibly easy. You can simply access a business loan foreclosure calculator online and enter the required values to calculate business loan foreclosure amount. Here’s how you can use Tata Capital’s Business Loan Foreclosure Calculator:

1

Enter Loan amount

Enter your business loan amount by using the slider or typing directly in the relevant box.

2

Set loan tenure

Enter or set your business loan tenure or duration in months or years.

3

Enter interest rate

Enter or set the applicable rate of interest on your business loan.

4

Enter foreclosure charges

Enter the foreclosure charges charged by your lender in percentage.

5

Enter foreclosure duration

Select an appropriate duration during which you want to foreclose your business loan.

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