How Does Partial Payment Work on Loans

Partial payment is an additional repayment made towards the outstanding loan amount, in addition to the regular EMI obligation. A regular EMI is the scheduled amount payable according to your repayment plan, while a partial payment is an additional amount paid separately towards the outstanding loan balance. When applied towards the principal, it can reduce the amount on which future interest is calculated. The impact of partial payment depends on your loan type and applicable terms. It may result in a lower EMI, a shorter loan tenure, or another adjustment to the repayment schedule. Before making a partial payment, check whether your loan is eligible for partial prepayment, the applicable payment terms, and any charges that may apply. Also, understand how the payment may affect your EMI or remaining tenure. If your account has an overdue EMI or other outstanding dues, verify whether it is required to be cleared separately before making a partial payment.

What changes in your loan after a partial payment? 

A partial payment can reduce the outstanding principal and may lower the interest payable over the remaining loan tenure. When an eligible part-prepayment is applied, the outstanding loan balance reduces by the applicable amount. This can reduce future interest costs, as interest is generally calculated on the outstanding balance. However, the exact impact depends on your loan type and applicable terms. The payment may result in a lower EMI, shorter tenure, or another adjustment to the repayment schedule.

The impact of a partial payment depends on your loan terms and how the payment is applied. It may reduce your outstanding principal and future interest, while the repayment schedule may be adjusted through a lower EMI or shorter tenure. Any overdue amount may continue to remain payable separately. After processing, review your updated loan statement or repayment schedule to confirm the revised balance, EMI, tenure, and remaining dues.

Eligible borrowers can make a partial payment through the Bajaj Finance customer portal and mobile App, subject to the options available for their loan account. Sign in with your registered mobile number and OTP, select the relevant loan account, and choose the applicable part-prepayment option. Review the payment details, including any applicable terms or charges, before completing the transaction.

You can generally follow these steps through the available online service:

1. Open the Bajaj Finance customer portal and sign in using your registered mobile number and OTP.
2. Complete the required identity verification.
3. Go to My Relations and select the relevant loan account.
4. Select Make Payments or the applicable loan payment option.
5. Choose Part-prepayment.
6. Enter the required amount and review the applicable terms or charges shown for your loan.
7. Select the available payment method and complete the transaction.
8. Check your loan statement or repayment schedule after the payment has been processed.

The available part-prepayment option and payment process may vary depending on your loan type and account. If the option is not available, use only the payment options displayed for your loan rather than selecting a different payment category. After completing the payment, retain the transaction confirmation and check your updated loan statement or repayment schedule once the payment is processed.

When does it make sense to make a partial payment?

A part-prepayment can be useful when you have surplus funds but are not in a position to repay the entire loan at once. It allows you to put a lump sum towards your outstanding principal, while continuing with your applicable repayment schedule. This may be relevant when you receive a bonus, an investment maturity amount, or another one-time inflow. A part-prepayment may make sense when:

• You want to reduce the outstanding principal and potentially lower future interest costs
• You have surplus funds but not enough to close the loan in full
• You want to reduce the remaining loan tenure, subject to the applicable terms
• You want to bring down your outstanding amount while continuing regular EMI payments

If your account has overdue EMIs, check the total amount due before making a partial payment. An additional payment does not necessarily clear overdue amounts unless it is applied towards those dues. Timely repayment can help prevent further applicable charges and keep your account up to date.

What happens if you delay instead of making a partial payment?

Delaying repayment can leave the outstanding balance unpaid and may increase the cost of maintaining the overdue account. If your loan has an overdue EMI, the unpaid amount may continue to attract applicable interest and charges for as long as it remains outstanding. A prolonged overdue status can also affect your CIBIL record. As specified in the DMS guidelines, a default that remains unpaid for 90 days can have consequences for the borrower's credit record. If you cannot clear the full overdue amount at once, making a payment towards the applicable dues may help reduce the outstanding amount. However, a partial payment does not automatically regularise the account unless the applicable overdue dues are fully addressed. Check your loan statement for the current amount due and the available payment options before making a payment. Timely repayment can help you avoid the continued accumulation of applicable charges and further impact on your credit record.