What is the meaning of part-prepayment?
Part-prepayment refers to making a partial payment on a loan before the scheduled due date. This allows borrowers to reduce their outstanding balance, potentially saving on interest costs. Lenders may have specific terms and conditions regarding part-prepayments, including any associated fees or restrictions.
What are Bajaj Finance Personal Loan part prepayment charges?
- There are no part-prepayment charges levied if you have opted for the Flexi Personal Loan.
- If you have a normal term loan, you have to pay up to 4.72% (inclusive of applicable taxes) on the prepaid amount, provided that it is greater than the one EMI.
What is loan foreclosure?
Personal loan foreclosure is when you pay off the entire balance of your loan in one single payment rather than making several EMI payments. You can choose the personal loan foreclosure option if you have surplus funds that you would like to use to pay off your existing personal loan.
Additional read: What is personal loan NOC?
What are Bajaj Finserv Personal Loan foreclosure charges?
Making part-prepayments to your loan account or foreclosing it before time, helps reduce your debt burden. If you wish to part-prepay or foreclose your Bajaj Finserv Personal Loan, you have to pay the following mentioned charges:
- If you wish to foreclose your loan account, you have to pay up to 4.72% (inclusive of applicable taxes) on the remaining principal as it stands on the date of full prepayment.
- If you opt for a Flexi Personal Loan, you will be charged up to 4.72% (inclusive of applicable taxes) on the total amount withdrawn*.
Access your account through the customer portal - Bajaj Finserv customer service portal to do part prepayment or make foreclosure of your personal loan.
Read here to know more about the personal loan interest rates and applicable charges.
Benefits of personal loan foreclosure & part-prepayment
Foreclosing or partially prepaying a personal loan offers various benefits. It enables borrowers to reduce interest payments, saving money over the loan term. Early repayment provides flexibility and may shorten the loan tenure, empowering borrowers with financial freedom.
Things to consider before going for part-prepayment or foreclosure of loan
Before opting for loan part-prepayment or foreclosure, consider factors like prepayment penalties, fees, and the impact on overall interest savings. Assess your financial situation to ensure it aligns with the benefits of early repayment. Confirm terms and conditions with the lender and evaluate if it suits your long-term financial goals.
Read More: Differences between flat and reducing interest rate
In conclusion, part-prepayment on a personal loan offers borrowers the advantage of interest savings and financial flexibility. However, it's crucial for individuals to carefully examine the terms and conditions, consider prepayment charges, and assess the overall impact on their financial situation. Making informed decisions regarding part-prepayment can contribute to long-term financial well-being and debt management.
Frequently asked questions
Yes, you can partially close a loan through personal loan part prepayment. Making a lump sum payment before the loan tenure ends reduces the outstanding balance and can potentially lower the overall interest cost.
Yes, part prepayment of a loan does have an impact on the CIBIL Score. Responsible management of such prepayments may have a positive impact, demonstrating good repayment behaviour. However, lenders can also perceive frequent or substantial prepayments as potential credit risks.
Prepayment charges apply when a borrower pays off a part of the loan before the scheduled due date. Foreclosure charges, on the other hand, are incurred when the entire outstanding loan amount is repaid before the agreed-upon tenure. Both charges compensate lenders for potential lost interest income due to early repayment.
A part-prepayment is the act of repaying a portion of a loan or debt before the scheduled due date. In the context of personal loans, it involves making an early payment to reduce the outstanding balance. This can lead to interest savings for the borrower, providing financial flexibility and reducing the overall debt burden.
The choice between prepayment and foreclosure depends on individual financial goals. Prepayment allows gradual repayment of a portion, offering flexibility and potential interest savings. Foreclosure involves settling the entire loan, reducing long-term interest but requiring a lump sum payment. The better option depends on one's financial situation and preferences.
