Understand the pros and cons before personal loan pre-closure, so that you do not regret later..

A personal loan is very useful in your difficult times. When you are not able to arrange money from anywhere, then you can fulfill your need for money by taking a personal loan. But as easily as you get a personal loan, it is equally difficult to repay it. The reason for this is that the interest rates of personal loans are very high, due to which your EMI is also quite high. Therefore, everyone thinks of getting rid of this loan as soon as possible. The way to get rid of it is pre-closure. But before taking this decision, you should understand the pros and cons of pre-closure once so that you do not regret it later.

Benefits of pre-closure

The first advantage of personal loan pre-closure is that you save a huge amount going into interest. The hassle of paying EMI every month ends. After pre-closure, you can invest the EMI amount somewhere else. Apart from this, your credit score also improves because the bank gets the message that you are financially capable, which is why you are repaying the loan on time.

You may have to bear these losses.

While pre-closing a personal loan, the bank can charge you a penalty for this. Many banks charge a penalty while prepaying a personal loan, although it is charged on pre-payment for a certain period. Apart from this, if you are making a pre-payment just to get rid of EMI, then you may have to spend your savings on this. In such a situation, there may be a problem in case of emergency or at the time of a good investment.

You can get personal loan pre-closure done in these ways.

Loan pre-payment closure

When you close the loan before the loan period ends, it is called loan pre-closure or loan pre-payment closure. All banks have different lock-in periods, before which the loan can be closed. Some banks charge a fee on preclosure while some banks do not charge for it. In such a situation, to close the loan before time, you should first talk to the bank.

Personal loan part payment

If you do not have the money to close the loan at once, then you can also get the loan closed before time by making partial payments from time to time. In this, whenever you have some money collected, you pay it. In this, you get two options - first, your EMI becomes smaller, and second, the loan period becomes shorter. Which option you want to choose from this, depends on you. For part payment, you have to apply to the bank.

Regular close

In this, the customer pays his EMI every month till the fixed time. After the EMI is completed, the bank is contacted for loan closure as soon as the last installment is due. For this, if you want, you can also talk to customer care.