Personal loans are easy-to-get, quick, convenient and flexible. So, it is of no wonder that personal loan is one of the most popular financial products in the country. In spite of its popularity, most Indians feel the need of risk aversion and more often than not, they want to go for loan pre-closure whenever their finances allow it.
What does personal loan pre-payment mean?
Pre-payment or early repayment is a payment you make towards your loan repayment before the completion of your loan tenure.
When should you consider pre-closing your personal loan?
The best time to pre-close your loan is in the initial stages of the loan tenure. If pre-payment is done relatively early into the loan tenure, you tend to save a lot of money on the interest.
Personal Loan Pre-Payment Possibilities
There are two ways of making pre-payments: paying off the loan completely or paying it by part. Banks cannot stop you from making pre-payments, however, they can charge you a penalty for it. Most of the banks levy pre-closure charges for a personal loan ranging from 1-4% of the outstanding loan amount.
Let’s understand in detail the personal loan pre-payment possibilities:
Usually, banks have a lock-in period of 1 year. If you want to pay off your outstanding principal amount in full or part, you will have to wait until that period ends.
How can you pre-close your MoneyTap Personal Loan 2.0?
MoneyTap’s personal loan closure procedure:
To foreclose the loan, you need to contact the bank/NBFC you have been approved the personal loan from and inform them about your desire to foreclose the loan.
FAQs on Personal Loan Pre-Payment
Note: As of now, MoneyTap offers only personal loan full pre-payment option.
Note: Personal loan pre-payment option is not available for DMI approved customers.