Foreclosing a loan

Here are the list of things to check before one closes his loan in advance.

1. Inform the bank about the date of pre-payment through a letter.
Its better to give a month's notice to the bank.This gives time to the bank to calculate the exact outstanding interest and penalty that has to be paid. (if any).

2. Take a letter from the bank regarding the exact amount that needs to be paid and the break-up of the amount. Also,ask for acknowledgment of the cheque through which you prepay the loan.

3. You will get the documents once the cheque gets cleared. Takes usually 15 days.

4. Check the original documents received from the bank with the duplicate copies you have kept. Ensure that EVERY SHEET is intact.