3 min
14-April-2025
Paying your EMIs in advance for a Loan Against Securities (LAS) can be a strategic financial move that offers several advantages beyond just staying ahead on payments. Unlike traditional loans, LAS allows you to borrow against the value of your shares, mutual funds, or other eligible securities, giving you access to quick liquidity without selling your investments. Opting for advance EMI payments not only helps in reducing your overall interest burden but also strengthens your credit profile by showcasing financial discipline. It provides peace of mind, ensures you don’t miss due dates, and shields you from late fees or penalties. Moreover, some lenders may even offer benefits or discounts for making advance payments. Whether you're looking to clear dues faster or manage irregular income more efficiently, advance EMI payments give you better control over your loan. In this article, we explore how advance payments work, their benefits, and how you can leverage them smartly.
When you take a LAS, your pledged securities act as collateral, and interest is charged on the amount drawn from your overdraft limit. The EMI includes both interest and, depending on the agreement, a portion of the principal. By paying these installments in advance, you can reduce the outstanding loan balance sooner, which in turn reduces the total interest outgo over the loan term.
Advance EMI payments also serve as a proactive step to avoid missing due dates, which can attract penalties or affect your credit score. This approach is particularly helpful if you receive a lump sum income from a bonus, investment, or other financial windfall and want to use it to ease future loan obligations.
Moreover, some lenders may offer benefits such as partial interest waivers or fee reductions for borrowers who make advance payments, though this varies depending on the lender’s policy. It’s always advisable to check with your financial provider to understand the exact terms and potential advantages.
In summary, Advance EMI is a repayment option that offers financial flexibility and can help you manage your LAS more efficiently. It’s an excellent choice for borrowers looking to stay ahead on payments, save on interest, and maintain a positive credit track record.
Early EMI payment:
In advance EMI, you pay one or more EMIs before their scheduled due dates. This could be at the start of the loan or during the repayment period.
Helps reduce interest burden:
Since interest in LAS is calculated on the outstanding loan amount, paying EMIs in advance reduces your principal faster, thereby lowering your interest costs over time.
Applicable for part or full EMI:
You can choose to pay a full EMI or a few EMIs in bulk depending on your financial capacity. Partial advance payments are also accepted by many lenders.
No penalties on advance payments:
Unlike pre-closure charges, most lenders do not levy penalties for advance EMI payments. It’s considered a borrower-friendly feature.
Reduces risk of default:
Paying EMIs in advance ensures you’re ahead of your payment schedule, which minimizes the risk of missing a due date and facing late payment charges.
Improves credit health:
Regular or advance EMI payments positively impact your credit score, showing lenders that you're a reliable and proactive borrower.
Lender-specific policies:
Some lenders may offer minor discounts, lower processing charges, or interest adjustments for advance payments. Always check your loan agreement or consult your lender for such benefits.
Convenient through online platforms:
Advance EMI payments can be made easily via your lender’s website or mobile app, giving you flexibility and control over your repayment.
By understanding how advance EMI works, you can use this option wisely to reduce your loan burden and better manage your financial obligations.
Reduces overall interest payable
When you pay EMIs in advance, your principal amount reduces faster, which in turn lowers the total interest paid over the loan tenure.
Improves credit score
Advance payments reflect positively on your credit report, showcasing strong repayment behavior and improving your creditworthiness.
Avoids late payment charges
By paying before the due date, you eliminate the risk of incurring penalties or late fees, ensuring your account stays in good standing.
Lowers outstanding loan amount sooner
Advance EMI payments help bring down your loan balance quicker than scheduled, offering financial relief in the long run.
Offers greater financial discipline
It instills a habit of budgeting and early repayment, which can benefit your overall financial planning and reduce debt stress.
Builds a good relationship with the lender
Regular advance payments show your lender that you're a responsible borrower, which may help you negotiate better terms for future loans.
Frees up future cash flow
By clearing some EMIs early, you reduce your monthly outgo in the following months, which can free up cash for other financial priorities.
May qualify for lender discounts
Some lenders offer concessions such as reduced interest rates, waived charges, or processing fee reductions for borrowers who opt for advance payments.
Protects against market fluctuations
In case of a drop in the value of your pledged securities, a lower outstanding balance can protect you from forced liquidation.
Convenient and easy to process
Advance EMI payments can be made through the lender’s online portal or mobile app, offering a quick and user-friendly experience.
In summary, opting for Advance EMI on a LAS provides multiple benefits that go beyond just saving interest—it helps you stay financially ahead.
Shortens the loan tenure
Paying EMIs in advance helps reduce the principal faster, which can shorten the overall loan term if the lender adjusts your schedule accordingly.
Reduces interest burden
With a lower outstanding loan amount due to advance payments, interest is calculated on a smaller principal, resulting in significant savings over time.
Improves payment buffer
By staying ahead of the due dates, you create a cushion in your schedule—protecting yourself from penalties during months when income might be tight.
Better financial forecasting
Advance EMIs give you more control over your monthly obligations and allow you to forecast future payments with more clarity and less uncertainty.
Minimizes the risk of overdue dues
Advance EMI payments reduce the chances of missed payments, which in turn keeps your account in good standing and shields you from late charges.
Flexibility in managing future EMIs After making advance payments, you might consider exploring options like EMI restructuring for even more control over your repayment schedule.
Reflected in your loan statement Your prepayments and new outstanding balances are clearly shown in your Bajaj Finance loan statement online, allowing you to track the impact in real-time.
Prevents liquidity pressures
By reducing the number of future EMIs, advance payments ease the cash outflow in later months—especially useful during emergencies or unplanned expenses.
Encourages proactive financial behavior
This repayment habit builds a stronger credit profile and reflects sound financial planning, which may help during future loan applications.
No negative impact on credit score
Unlike missed or delayed payments, advance EMIs have either a neutral or positive impact on your credit score, contributing to financial stability.
Lender-specific adjustments
Depending on the lender’s policy, your repayment schedule might be revised or kept the same—always confirm with your provider.
In essence, advance EMI payments bring flexibility, savings, and control, helping you stay ahead on your LAS while improving your financial health.
What is advance EMI for a loan against securities?
Advance EMI for a Loan Against Securities (LAS) refers to the option where the borrower pays one or more Equated Monthly Installments (EMIs) ahead of the scheduled due dates. Instead of waiting for the monthly cycle to come around, you voluntarily make EMI payments in advance—either at the beginning of the loan tenure or during the repayment period. This prepayment approach is entirely optional and can be used strategically to reduce your overall loan burden.When you take a LAS, your pledged securities act as collateral, and interest is charged on the amount drawn from your overdraft limit. The EMI includes both interest and, depending on the agreement, a portion of the principal. By paying these installments in advance, you can reduce the outstanding loan balance sooner, which in turn reduces the total interest outgo over the loan term.
Advance EMI payments also serve as a proactive step to avoid missing due dates, which can attract penalties or affect your credit score. This approach is particularly helpful if you receive a lump sum income from a bonus, investment, or other financial windfall and want to use it to ease future loan obligations.
Moreover, some lenders may offer benefits such as partial interest waivers or fee reductions for borrowers who make advance payments, though this varies depending on the lender’s policy. It’s always advisable to check with your financial provider to understand the exact terms and potential advantages.
In summary, Advance EMI is a repayment option that offers financial flexibility and can help you manage your LAS more efficiently. It’s an excellent choice for borrowers looking to stay ahead on payments, save on interest, and maintain a positive credit track record.
How does advance EMI work in a loan against securities?
Advance EMI payments offer a smart way to manage your Loan Against Securities (LAS) by helping reduce interest outgo and keeping your repayment on track. Here's how it works:Early EMI payment:
In advance EMI, you pay one or more EMIs before their scheduled due dates. This could be at the start of the loan or during the repayment period.
Helps reduce interest burden:
Since interest in LAS is calculated on the outstanding loan amount, paying EMIs in advance reduces your principal faster, thereby lowering your interest costs over time.
Applicable for part or full EMI:
You can choose to pay a full EMI or a few EMIs in bulk depending on your financial capacity. Partial advance payments are also accepted by many lenders.
No penalties on advance payments:
Unlike pre-closure charges, most lenders do not levy penalties for advance EMI payments. It’s considered a borrower-friendly feature.
Reduces risk of default:
Paying EMIs in advance ensures you’re ahead of your payment schedule, which minimizes the risk of missing a due date and facing late payment charges.
Improves credit health:
Regular or advance EMI payments positively impact your credit score, showing lenders that you're a reliable and proactive borrower.
Lender-specific policies:
Some lenders may offer minor discounts, lower processing charges, or interest adjustments for advance payments. Always check your loan agreement or consult your lender for such benefits.
Convenient through online platforms:
Advance EMI payments can be made easily via your lender’s website or mobile app, giving you flexibility and control over your repayment.
By understanding how advance EMI works, you can use this option wisely to reduce your loan burden and better manage your financial obligations.
Benefits of opting for advance EMI on a loan against securities
Paying Advance EMIs on a Loan Against Securities (LAS) can be a smart financial strategy. It not only helps you manage your loan more efficiently but also offers a range of long-term benefits. Here are the key advantages:Reduces overall interest payable
When you pay EMIs in advance, your principal amount reduces faster, which in turn lowers the total interest paid over the loan tenure.
Improves credit score
Advance payments reflect positively on your credit report, showcasing strong repayment behavior and improving your creditworthiness.
Avoids late payment charges
By paying before the due date, you eliminate the risk of incurring penalties or late fees, ensuring your account stays in good standing.
Lowers outstanding loan amount sooner
Advance EMI payments help bring down your loan balance quicker than scheduled, offering financial relief in the long run.
Offers greater financial discipline
It instills a habit of budgeting and early repayment, which can benefit your overall financial planning and reduce debt stress.
Builds a good relationship with the lender
Regular advance payments show your lender that you're a responsible borrower, which may help you negotiate better terms for future loans.
Frees up future cash flow
By clearing some EMIs early, you reduce your monthly outgo in the following months, which can free up cash for other financial priorities.
May qualify for lender discounts
Some lenders offer concessions such as reduced interest rates, waived charges, or processing fee reductions for borrowers who opt for advance payments.
Protects against market fluctuations
In case of a drop in the value of your pledged securities, a lower outstanding balance can protect you from forced liquidation.
Convenient and easy to process
Advance EMI payments can be made through the lender’s online portal or mobile app, offering a quick and user-friendly experience.
In summary, opting for Advance EMI on a LAS provides multiple benefits that go beyond just saving interest—it helps you stay financially ahead.
Impact of advance EMI on your loan against securities repayment schedule
Making advance EMI payments on your Loan Against Securities (LAS) can significantly alter your repayment schedule in a positive way. Here are the key ways it impacts your loan timeline and overall repayment experience:Shortens the loan tenure
Paying EMIs in advance helps reduce the principal faster, which can shorten the overall loan term if the lender adjusts your schedule accordingly.
Reduces interest burden
With a lower outstanding loan amount due to advance payments, interest is calculated on a smaller principal, resulting in significant savings over time.
Improves payment buffer
By staying ahead of the due dates, you create a cushion in your schedule—protecting yourself from penalties during months when income might be tight.
Better financial forecasting
Advance EMIs give you more control over your monthly obligations and allow you to forecast future payments with more clarity and less uncertainty.
Minimizes the risk of overdue dues
Advance EMI payments reduce the chances of missed payments, which in turn keeps your account in good standing and shields you from late charges.
Flexibility in managing future EMIs After making advance payments, you might consider exploring options like EMI restructuring for even more control over your repayment schedule.
Reflected in your loan statement Your prepayments and new outstanding balances are clearly shown in your Bajaj Finance loan statement online, allowing you to track the impact in real-time.
Prevents liquidity pressures
By reducing the number of future EMIs, advance payments ease the cash outflow in later months—especially useful during emergencies or unplanned expenses.
Encourages proactive financial behavior
This repayment habit builds a stronger credit profile and reflects sound financial planning, which may help during future loan applications.
No negative impact on credit score
Unlike missed or delayed payments, advance EMIs have either a neutral or positive impact on your credit score, contributing to financial stability.
Lender-specific adjustments
Depending on the lender’s policy, your repayment schedule might be revised or kept the same—always confirm with your provider.
In essence, advance EMI payments bring flexibility, savings, and control, helping you stay ahead on your LAS while improving your financial health.
