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Personal loan with zero foreclosure charges: Can you repay an instant loan within a month?

Key Takeaways

You can take a FIRSTmoney personal loan and foreclose it anytime, even within a month, with zero foreclosure charges.
When you foreclose, you pay the outstanding principal plus interest only for the days the loan was outstanding.
The one-time processing fee is charged at disbursal and is not refunded on foreclosure, so factor it into your total cost. FIRSTmoney currently offers zero processing fee on all loan amounts.
Before you borrow, check a lender’s foreclosure charges, lock-in period and how the fee is calculated.

16 Oct 2026 by Team FinFIRST

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Yes. If you need funds for a short-term gap, such as an urgent expense while you wait for a salary credit, bonus or client payment, you can take a FIRSTmoney personal loan and foreclose it as soon as the money arrives. Because there are no foreclosure charges, you avoid paying interest for the rest of the tenure without a penalty for closing early.

Here’s how foreclosure works, how interest is calculated, and what it actually costs to repay a personal loan within a month.

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How foreclosure works on an unsecured personal loan

Foreclosure is the process of closing your loan early. Instead of continuing repayments through the scheduled EMIs until the end of the tenure, you repay the entire outstanding amount in one go. Here's what typically happens:

1. Outstanding principal is calculated

The lender looks at the principal still unpaid, along with any interest and other dues applicable up to the foreclosure date.

2. Foreclosure charges are added

As applicable, a foreclosure charge are applied on the outstanding loan amount. However, with IDFC FIRST Bank FIRSTmoney personal loan you don’t have to incur any foreclosure charges.

3. The loan is closed

You pay the foreclosure amount, after which your EMI obligations end.

4. Closure is recorded

The lender updates your loan amount, and the same reflects as fully repaid in your credit report.

5. Relevant documents are issued

A No-Objection Certificate (NOC), loan closure letter, final payment receipt and confirmation of NACH cancellation are provided as evidence of loan settlement.

How to foreclose your FIRSTmoney personal loan by IDFC FIRST Bank

Open the IDFC App
Select Loans section
Select on the Loan Account Number you want to foreclosure
Click on the transaction – once you view the transaction click on Foreclose with 0 charges
You will be able to view the complete foreclosure amount
Select Payment details & proceed with making the payment
Once payment is processed your loan will be foreclosed.

You will be notified by SMS acknowledging that the loan has been foreclosed and status will be updated within 7 working days. It usually takes 2 days for the update to take place.

Also, you can foreclose the loan via the quickpay link .

Interest calculation: You pay only for the days you borrow

The interest on an instant loan is usually calculated on a reducing balance basis. You pay interest on the principal you still owe. So, your obligation changes as the loan principal reduces; so does the interest calculation.

Interest applies to the amount withdrawn

With a FIRSTmoney personal loan, you can withdraw amounts starting from ₹10,000 from your available loan offer and pay interest only on the amount you withdraw.

The outstanding balance reduces

As you repay part of the principal through EMIs, the balance on which the interest is calculated gradually reduces.

No future interest accumulation

Once you close the loan early, you can reduce the interest you would otherwise pay over the future months. You can also save on the foreclosure charges on a personal loan with FIRSTmoney.

Worked Example: Foreclosing a ₹1 lakh loan after one month

Suppose you take a FIRSTmoney personal loan of ₹1,00,000 at an interest rate of 9.99% p.a. for 12 months. Here's how the interest and outstanding principal would change as you repay your EMIs.

Particulars	Keep the loan for 12 months	Foreclose after 1 month
Loan amount	₹1,00,000	₹1,00,000
Interest paid	₹5,492	≈ ₹833
Foreclosure charges (FIRSTmoney)	Not applicable	₹0
Total repayment (excluding processing fee)	₹1,05,492	≈ ₹1,00,833

By foreclosing after a month, you save about ₹4,659 in interest. If a lender charged a 4% foreclosure fee instead, closing the same loan would cost an extra ₹4,000 plus ₹720 GST, totalling ₹4,720.

The processing fee and GST are charged at disbursal in both cases and are not refunded on foreclosure. With FIRSTmoney personal loan, you can enjoy zero processing fee on all loan amounts as a limited time offer.

Illustrative only, based on a monthly reducing balance at 9.99% p.a. Actual interest depends on the exact number of days, the repayment date and your loan terms.

Personal loan foreclosure charges: What to check before you borrow

Personal loan foreclosure charges are part of repaying your loan early. Consider the following aspects to gain clarity on them:

How the fee is calculated: Check whether the foreclosure fee is charged as a percentage of the outstanding principal or as a fixed amount or zero.

Lock-in period: Some personal loans may have a minimum period before full prepayment is permissible. For example, a lender may require you to pay at least 6 EMIs before allowing you to foreclose the loan. There is no lock-in period for FIRSTmoney personal loan.

Timing: Check if the cost of foreclosure and the benefit you expect are worth it based on when you prepay the loan. For example, prepaying close to maturity offers limited savings.

Zero foreclosure option: Check for a personal loan with zero foreclosure charges, like FIRSTmoney by IDFC FIRST Bank.

Outstanding dues: Ensure you've cleared any unpaid EMI, late fee, or other applicable charges.

Final thoughts

If you know your cash-flow gap is temporary, you can get a personal loan with a plan to foreclose early. Use a personal loan foreclosure calculator to estimate the total cost vs savings of paying off your entire loan balance early. Once you are prepared, you can avoid carrying the cost longer than necessary. IDFC FIRST Bank supports you in this responsible repayment decision by waiving the foreclosure fee. Close your loan any time you want without additional cost.

Frequently Asked Questions

Are there charges for closing a personal loan early?

There can be, depending on the lender. With FIRSTmoney personal loan, there are zero foreclosure charges.

How is interest calculated if I foreclose within a month?

The interest is calculated on the outstanding principal for one month.

Is there a minimum lock-in period before I can foreclose a personal loan?

It depends on the lender. Some lenders may apply a lock-in period of 6 to 12 months. However, FIRSTmoney personal loan by IDFC FIRST Bank has no lock-in period. You can foreclose it whenever you want.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.