How to Make Advance Payment for Professional Loan?

A professional loan advance payment is a financial strategy where you pay a portion of your loan’s EMIs (equated monthly instalments) in advance. This reduces your overall loan burden by either lowering the tenure of the loan or decreasing your monthly EMI amount.

For example, if you have taken a professional loan from Bajaj Finserv, you can choose to pay a lump sum amount ahead of schedule. This amount is adjusted against your outstanding principal, which directly reduces the interest you pay over time.

Key benefits of professional loan advance payment:

1. Lower interest costs: By reducing the outstanding principal, you save on the interest amount that would have been charged on the unpaid balance.
2. Improved financial flexibility: Advance payments allow you to manage your loan repayment schedule more effectively.
3. Faster loan closure: If you aim to become debt-free sooner, advance payments can help you close the loan before the original tenure ends.
4. Better credit profile: Paying your loan in advance reflects positively on your credit history and improves your CIBIL score.

Who is eligible?

Professional loan advance payment is available to existing Bajaj Finserv customers with active loan accounts. You do not need additional approval or re-verification to use this feature. 

One of the biggest advantages of making advance payments on your professional loan is the potential savings on interest. The earlier you make the payment, the more you save.

Example Scenario:

Let us assume you have a professional loan of Rs. 10 lakh at an interest rate of 12% per annum for a tenure of 5 years.

Without advance payment:
Your total interest payable over 5 years would be approximately Rs. 3.34 lakh.

With advance payment:
If you make an advance payment of Rs. 2 lakh in the second year, your interest savings could be around Rs. 60,000, depending on the recalculated tenure or EMI amount.

Savings Calculator:

To estimate your savings, you can use the Bajaj Finserv Loan EMI Calculator available on their website. Simply enter your loan amount, interest rate, tenure, and the advance payment amount to see the updated figures.

Why it matters: Reducing your loan’s interest outflow not only saves money but also allows you to allocate funds toward other financial goals, such as investments or business expansion.

Making advance payments on your professional loan can have a significant impact on your credit health. Here is how:

Positive impact:

1. Reduced credit utilisation ratio: When you pay off a portion of your loan early, your outstanding debt decreases, improving your credit utilisation ratio.
2. Stronger repayment history: Advance payments demonstrate financial discipline, which is a key factor in determining your CIBIL score.
3. Better loan terms in the future: A higher CIBIL score increases your chances of securing loans with lower interest rates and favourable terms.

Cautionary note:

While advance payments are beneficial, it is essential to ensure that you do not overextend your finances. Missing EMIs after making an advance payment can still negatively affect your CIBIL score and incur late fees.

Tip: Set up reminders or enable auto-debit for your EMIs to avoid missing payments.

How to get started with professional loan advance payment

If you are an existing Bajaj Finserv customer, here are the steps to make an advance payment:

1. Log in to your account: Visit the Bajaj Finserv customer portal or use the mobile app.
2. View loan details: Navigate to your active loan account to check the outstanding balance and payment schedule.
3. Choose advance payment: Select the option for advance payment and enter the amount you wish to pay.
4. Complete payment: Use a secure payment method to complete the transaction.

Pro Tip: Download your updated loan statement after making the payment to keep track of your revised schedule.

Conclusion

Professional loan advance payment is a smart financial strategy for reducing debt and saving on interest. Whether you want to close your loan early or lower your EMIs, this option provides flexibility and long-term benefits.

As an existing Bajaj Finserv customer, you can easily make advance payments via their app or portal. Use the Bajaj Finserv Loan EMI Calculator to estimate your savings and take the first step toward financial freedom today.