Can You Cancel an Online Personal Loan After Approval?

Are you wondering about the feasibility of canceling an online personal loan after it has been approved? This guide will help you understand the process and whether it is possible to revoke or reverse an approved personal loan.

Understanding the Loan Approval and Disbursement Process

With the rise of digital financial services, obtaining an online personal loan has become more accessible and convenient than ever before. Once approved, the loan application can often be disbursed within 24 hours or a single working day, depending on the lender and the platform you are using.

One of the key points to remember is that cancellation is only possible before the loan amount is actually disbursed into your bank account. If the funds have already been credited to your account, it is not possible to reverse or cancel the loan. Therefore, it is crucial to make any decisions about canceling the loan application as soon as possible, ideally before the deal confirmation and disbursement of funds.

Consequences if the Loan Amount is Disbursed

There are several potential consequences if the loan amount is disbursed before you decide to cancel your personal loan application:

Foreclosure Charges: You might be required to pay certain fees such as foreclosure charges, processing fees, and service taxes. Interest for the Period Between Sanction and Cancellation: Additionally, you may be charged interest for the period between the loanbeing sanctioned and then being canceled.

Impact on Credit Score

Another important aspect to consider is the impact on your credit score. If you cancel your personal loan application immediately after placing the request, before the hard inquiry is made, it will not affect your credit score. The lender's investigation, which would have already occurred at this point, will still be recorded, but canceling the loan will have no further impact on your credit score.

However, once the lender has sanctioned your loan and the hard inquiry has been made, canceling the loan will not undo the impact on your credit. Therefore, it is essential to make any decisions about canceling the loan application as quickly as possible to minimize any potential negative effects on your credit.

Conclusion

While personal loan cancellation is only possible before the amount is disbursed, the decision to cancel should be made as early as possible in the process. If you find yourself in the unfortunate position where the loan has already been approved and disbursed, the best course of action is to contact the lender to discuss your options and any fees that may apply.

Remember, taking the time to review and understand the terms and conditions of your loan application can help prevent unnecessary complications and ensure a smooth borrowing experience. Always consult with the lender if you have any doubts or concerns about the cancellation process.