How do I cancel a personal loan after deal confirmation

A deal confirmation for a Personal Loan states that the borrower has surpassed all the verification steps required for loan approval. However, a Personal Loan cancellation is only possible before the amount is disbursed to your bank account. Once the loan amount is credited, it is not possible to reverse or cancel the Personal Loan application. So, be very clear on applying for Personal Loans so that cancellation doesn’t occur at any step.

Nowadays, with instant personal loan apps, loan approval and disbursement are quick. So, if you feel the need for Personal Loan cancellation, take the decision before the deal is confirmed and the funds are disbursed.

In the event of Personal Loan cancellation, you may be liable to pay interest or cancellation charges, which vary from lender to lender. The scope of Personal Loan cancellation entirely depends upon the lender’s loan policy and terms. Better do not apply for a Personal Loan when you are unsure, otherwise bear the penalty charges for loan cancellation.

A personal loan EMI calculator is a useful tool that lets you estimate monthly instalments in advance. If the EMI seems high, you can adjust the loan amount or tenure to find a more affordable option—or reconsider applying. Submitting an application when you're unsure about repayment can lead to avoidable cancellations later, especially if the repayment burden feels unmanageable from the start.

When Can You Cancel a Personal Loan?

Before Disbursement: If your loan has been approved but you have yet to receive the money in your bank account, cancellation is relatively simple. You can: 

1. cancel via app (typically for instant loan apps) 
2. email or call customer support 
3. make a cancellation request, online or in writing 

After Disbursement: Once the money has been credited to your bank account, cancelling is much more complex. You may ultimately have to pay back the full amount that was disbursed to your bank account, including any fees that apply to it. This is referred to as pre-closure or foreclosure.

Here are certain ways you can cancel a Personal Loan

Instant loan apps

Nowadays, instant loan apps are commonly used for personal loan applications. You can withdraw or abort the instant personal loan procedure at any step before approval. Once the loan approval is received, the disbursement will follow which cannot guarantee Personal Loan cancellation after deal confirmation.

Customer Support

If you have applied for a long-term Personal Loan online without instant personal loan apps, it is good to express your cancellation request in a precise email or a formal letter to the customer support team mentioning the purpose of cancellation and asking for its procedure.

Personal Loan Manager

If your Personal Loan account is managed by a relationship manager, it is wise to get in touch with them to explain the reason for cancellation and perform the related formalities.

Pre-closure

This step is not possible before the deal confirmation of Personal Loan. A pre-closure of loan means paying off the loan earlier than the schedule and closing the Personal Loan account as soon as possible. A pre-closure procedure involves penalty charges to cover up the interest rate that the lender could not earn in EMIs.

Once you are through with the Personal Loan cancellation procedure, ensure you take an acknowledgment of the amount paid for deal cancellation. The financial company or the lender will also dispatch a document copy of Personal Loan cancellation in hand for any future reference. Once the Personal Loan account is closed, borrowers can move ahead with checking other investments and available credit options.

Also Read : Negotiating a Personal Loan Settlement: Here is What You Need to Know

What If the Loan Amount Has Been Disbursed?

Once the money is disbursed, you must follow the pre-closure process:

• Repay the entire loan amount
• Pay any interest accrued and prepayment charges (if applicable)
• Request an acknowledgment or confirmation letter from the lender

Tip: Review your loan agreement for details on pre-closure penalties and timelines.

Impact on Credit Score

• Before Disbursement: Minimal or no impact if cancelled quickly
• After Disbursement: May affect credit utilisation or score temporarily

Tip: Always get a loan cancellation confirmation to avoid future reporting issues.

Also Read : Planning to Pre-Close Your Personal Loan? Check When It Would Be a Good Option

Conclusion

Cancelling a Personal Loan is quite simple, especially before it is disbursed. Most lenders have an online Personal Loan cancellation process which you should be able to find on their website or app. After it is disbursed, the only way to cancel the loan is to pre-close it. Pre-closing a loan means you pay off the loan amount fully with interest applicable. Always read through your loan agreement carefully and make any requests for cancellation as soon as possible. If you do not want to cancel the Personal Loan, you can consider either a part-prepayment, or restructuring the loan with the lender. 

If you have any questions, please contact the support team at Hero FinCorp and consider our Personal Loans with flexible options today!

Frequently Asked Questions

Can I cancel my loan after it is approved but not disbursed?

Yes, you can cancel a Personal Loan after approval and before disbursement. You will need to reach out to the lender as soon as possible to submit a cancellation request and follow their procedures.

What happens if I cancel after the loan is disbursed?

Cancelling a loan after disbursement is treated like pre-closure. You will be asked to pay back the full balance and interest, and your lender may charge you fees or penalties based on their terms of lending.

Will cancellation affect my credit score?

Cancelling a loan before disbursement will likely not affect your credit score. But cancelling a Personal Loan after disbursement or cancelling loans multiple times may reflect as a hard enquiry on your credit report for a short period of time.

How long does it take to cancel a loan?

Loan cancellation typically takes anywhere from a couple of days to weeks, depending on the lender’s processing time, and time taken to complete all formalities and dues.

Can I apply for another loan immediately after cancelling one?

Yes, you may apply for another loan immediately after cancellation. However, repeated cancellations of loans may affect lender confidence in you as a borrower and possibly affect approval.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.