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Loan prepayment: If you are going to repay any loan before time, then reconsider your decision once. Do not decide on loan pre-payment in a hurry, because instead of benefit, you may suffer loss.

If you do the complete calculation, you will find that you have not got any special benefit, rather there are mostly chances of loss. If you have decided to pre-pay the loan, then definitely know when it can be beneficial.

This option is given by the bank -

One of the easily available loans is also a personal loan, but more interest has to be paid on it than other loans. If you do not want to pay high interest on a personal loan (personal loan interest rates), then banks also give the option of repaying the entire loan before its fixed period, this is called loan pre-payment.

This will be the financial loss due to loan prepayment -

The bank also charges loan foreclosure charges for loan pre-payment. This causes financial loss to the customer. When making a loan prepayment, the calculation should be done by adding this charge.

It should be seen in this which option is saving between paying regular EMI and paying foreclosure charge. Only then can the loan pre-payment be beneficial, otherwise there will be a loss.

What will happen to the interest charged on EMI -

Pre-closure charges are often charged by the bank or NBFC at the rate of 1 to 5 percent of the outstanding loan amount. Charges are levied on loan pre-payment, but relief is obtained from the interest charged on the outstanding EMI. Only if your outstanding loan amount is high, then you can get more benefits from loan pre-payment rules.

How will loan prepayment affect CIBIL-

If you pay the loan in advance, your credit score usually improves. However, these rules (bank rules for loan prepayment) can also be different according to the bank. The credit score also improves well if the installment is paid every month according to the entire loan period fixed by the bank. Another advantage of loan prepayment is that you can easily get a loan in the future by looking at your loan repayment capacity.

The time of loan prepayment is important -

When you are repaying the loan (loan prepayment) before time, then that time is the most important. It depends on whether you will benefit or lose. If you have almost repaid the entire loan (bank loan news) and are making a prepayment when it is near, then you will not get much benefit, rather there is a possibility of some loss in it. Because foreclosure charges will be levied unnecessarily. That is, you can get more benefits from loan prepayment (loan pre-payment kab are) when more than half of the EMIs for loan repayment are remaining.

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