How to Close a Car Loan with SBI

Closing a car loan with the State Bank of India (SBI) involves several steps, ensuring that all financial obligations are met and that the loan account is officially closed. This process is crucial for maintaining a good credit score and avoiding any future complications. Here's a comprehensive guide on how to close your car loan with SBI.

1. Verify Loan Status:
Before initiating the closure process, it's important to verify your loan status. Ensure that all EMIs (Equated Monthly Installments) are paid up to date. You can check your loan balance and status through SBI’s online banking portal or by contacting the bank’s customer service.

2. Obtain the Loan Closure Statement:
Request a loan closure statement from SBI. This document will detail the outstanding balance of your loan, including any prepayment charges or penalties if applicable. You can obtain this statement by visiting the nearest SBI branch or through online banking.

3. Arrange for Prepayment or Full Payment:
If you have not completed the loan tenure, you will need to pay the remaining balance. SBI allows for prepayment or full repayment of the loan. If you're paying off the loan early, make sure you understand any prepayment penalties or charges that might apply.

4. Prepare Required Documents:
To close your car loan, you will need to submit certain documents. These typically include:

• Loan Closure Request Form
• Original loan agreement documents
• Identity proof (e.g., Aadhar card, passport)
• Proof of payment (if applicable)

5. Submit a Closure Request:
Visit your local SBI branch with the required documents and submit a loan closure request. Ensure that you request a formal closure of your loan account and that you receive an acknowledgment receipt for your records.

6. Clear Outstanding Dues:
Pay off any remaining dues, including the principal amount, interest, and any applicable charges. Once the payment is made, ensure that you get a confirmation from the bank stating that the loan has been fully paid and that there are no outstanding dues.

7. Collect No-Objection Certificate (NOC):
After the payment is processed, SBI will issue a No-Objection Certificate (NOC). This certificate is crucial as it serves as proof that the loan has been repaid in full and that the bank has no further claims on the loan.

8. Collect and Verify Documents:
Once you receive the NOC, ensure that it includes all necessary details, such as the loan account number, loan closure date, and confirmation of zero dues. Keep a copy of this certificate in a safe place.

9. Get the Hypothecation Released:
If your car was hypothecated to SBI as security for the loan, you will need to get the hypothecation released from the vehicle's registration documents. Visit the local Regional Transport Office (RTO) with the NOC and other required documents to update the vehicle’s registration record.

10. Confirm Account Closure:
Finally, confirm that your loan account has been closed and that there are no remaining obligations. Check your credit report to ensure that the loan account is reported as closed and that there are no discrepancies.

Important Considerations:

• Prepayment Charges: Check if there are any prepayment charges or penalties. These are fees charged by the bank for paying off the loan before the end of its tenure.
• Timing: Ensure that all payments and documentation are completed before the end of the loan tenure to avoid additional charges or complications.
• Record Keeping: Maintain copies of all documents, receipts, and correspondence related to the loan closure for future reference.

By following these steps, you can successfully close your car loan with SBI, ensuring that your financial obligations are met and that you are free of any future liabilities related to the loan.