Loan cancellation procedure for already sanctioned loan

791 votes

Transferred is not the correct term. The correct term is disbursed. You may make a representation to the bank to stop the disbursement and to cancel the loan agreement. The bank will charge somewhat for that.

Advocate Ali Ahamed LawRato

289 votes

Canceling a loan that has already been sanctioned or disbursed can be a complex process and depends on various factors, including the terms and conditions of the loan agreement and the policies of the lending institution. Here are the general steps to consider if you want to cancel an already sanctioned loan:

1. Review Loan Agreement: Carefully review the loan agreement you signed with the lending institution. Pay close attention to the clauses related to loan cancellation, prepayment, and penalties for cancellation.
2. Contact the Lender: Reach out to the lending institution as soon as possible to express your intent to cancel the loan. Contact their customer service or visit the nearest branch to discuss the cancellation process.
3. Check the Cancellation Period: Some loans may have a specific cancellation period mentioned in the agreement. If you are within this period, it may be easier to cancel the loan without incurring significant charges.
4. Understand Cancellation Charges: Inquire about any cancellation charges or penalties that may apply. Lenders often charge fees for canceling a loan after it has been sanctioned or disbursed.
5. Provide a Written Request: Submit a written request for loan cancellation to the lender. Ensure that the request includes all necessary details, such as your loan account number, reasons for cancellation, and any supporting documentation.
6. Negotiate with the Lender: Discuss your reasons for canceling the loan with the lender. They may be willing to work with you to find a solution that minimizes cancellation charges or penalties.
7. Return Disbursed Amount: If the loan has already been disbursed, you may need to repay the disbursed amount to the lender, along with any interest or charges accrued up to that point.
8. Get Confirmation: Once the cancellation process is initiated and any outstanding amounts are settled, request written confirmation from the lender that the loan has been canceled.
9. Keep Documentation: Maintain copies of all communication, written requests, and receipts related to the loan cancellation process for your records.
10. Monitor Credit Report: Regularly check your credit report to ensure that the canceled loan is reflected accurately, with a notation that it was canceled by your request.

It's essential to consult with the lending institution and carefully read the loan agreement to understand the specific terms and conditions that apply to loan cancellation. If you encounter difficulties or disputes during the cancellation process, consider seeking legal advice to protect your rights and interests.
Please note that the loan cancellation process may vary depending on the type of loan (e.g., home loan, personal loan, car loan) and the lending institution's policies.

Advocate Chikirsha Mohanty LawRato