How to Cancel Consumer Durable Loan?

Cancelling your Consumer Durable Loan follows a specific process that involves three parties: yourself, the dealership where you purchased your products and availed the loan, and the lender who provided the loan. However, it is essential to understand the cancellation procedure to avoid any last-minute rush. This blog will guide you through the process of cancelling consumer durable loans. Keep reading!

Step-by-Step Consumer Durable Loan Cancellation Process

Cancelling a Consumer Durable Loan works in a slightly different manner than other loans, as it involves the dealer’s initiation before lenders become involved. Here’s how you would go about it and what you could expect from the process:

Step 1. Check the Cooling-Off Period Details

Find out about your lender’s specific terms before you proceed with the cancellation process, especially since terms vary across lenders. Usually, lenders have a cooling-off period during which you can cancel your loan. Once the period has passed, loan cancellation will either be challenging or incur specific penalties.

Step 2. Contact Your Dealer

As soon as you’re sure of your decision, inform your dealer of your intention to cancel the loan. Provided you’re within the cooling-off period and there are no hiccups to handle, the dealer will initiate the refund of your amount to your designated Virtual Account Number (VAN). The VAN enables the lender to identify the loan to which the refund is related easily.

Step 3. Confirmation by the Dealer

Once the refund is processed, the dealer will send an email to a sales representative from the lender’s end with your cancellation consent and the UTR (Unique Transaction Reference) number confirming the refund.

Step 4. Validation by the Loan Servicing Team

This step is handled entirely by the lender’s Loan Servicing team. They check:

• The trail of loan approval
• Confirmation of refund through UTR Number
• Insurance status
• VAS (Value Added Service) attachment status, if any

If your loan came with insurance or VAS, these must be cancelled or adjusted before closure.

Step 5. System Update and Final Closure

After validating all the details mentioned above, the lender will update the loan cancellation in their system, raising a Service Request (SR) for final closure. Any excess payment that you’ve made at the time of loan acquisition will be refunded to you, and you can consider the loan closed.

Also Read: How to Use Consumer Durable Loans for Diwali Home Makeovers

Things to Keep in Mind While Loan Closure

Here are four things you must not miss when closing your Consumer Durable Loan:

• Confirm the UTR Number: Always confirm that your dealer has provided the correct UTR number. This is crucial for the refund and cancellation process.
• Refund of Full Net Disbursement Amount: Ensure the dealer refunds the entire Net Disbursement Amount agreed upon under the original loan terms.
• Time for Processing: The process may keep you waiting for several working days while internal checks are completed. Continue to follow up with your dealer and lender for updates.
• Confirmation: Until the loan cancellation is reflected on the system and the lender hasn’t raised the final Service Request, do not assume the loan is cancelled. Do your due diligence as the borrower to check in with the dealer and lender for updates.

Also Read: Key Things to Know Before You Apply for a Consumer Durable Loan

Alternative Options to Loan Cancellation

If you’re hesitant about cancelling, consider the following:

• Restructure your loan to adjust repayment terms
• Negotiate a repayment plan that fits your current financial circumstances

These alternatives may help you avoid cancellation charges or lengthy processing times. Ensure you contact the dealer and lender to explore these alternatives.

Also Read: Easy EMI Consumer Durable Loans: Shop Smarter This Festive Season

To Conclude

The Consumer Durable Loan cancellation process requires you to check your cooling period, contact the dealer for confirmation, validation and final closure. Keep all the communication clear and ensure you follow up when required.

However, if you are looking for a Consumer Durable Loan with attractive terms and availability at a long list of reliable dealers, with a smooth cancellation policy. In that case, Poonawalla Fincorp can be your financing partner. Apply today!

FAQs

How to cancel my Consumer Durable Loan?

You must contact your dealer and inform them of your wish to cancel. The dealer will process the refund, after which your lender will complete the cancellation following their verification.

How long does it take to cancel a Consumer Durable Loan?

The cancellation normally takes a few working days based on the refund processing and the lender’s internal validation process.

Can I cancel a loan after it is approved?

Yes, cancellation can be possible after approval, but it depends on the loan disbursement status and the lender’s policies. Some lenders allow cancellation within a set duration of time, others allow it until you pay your first EMI, and some refuse cancellation after the loan is approved.

What documents are needed to cancel a Consumer Durable Loan?

Typically, you need to provide loan details, proof of purchase, your identification, and written consent to cancel. The dealer usually handles the transaction references.

Is there a cancellation fee for Consumer Durable Loans?

Cancellation fees vary by lender and the terms of your loan. Some NBFCs charge nominal fees, while others may allow cancellation without charges if done early.