Loan Part-Prepayment: Rules and Charges to Know

Loan part-prepayment means paying an additional amount towards your outstanding loan principal and your regular EMI. This extra payment reduces the principal balance, which can lower the interest charged on the remaining loan amount and potentially reduce the overall interest payable. The amount you can part-prepay and any applicable terms or charges depend on your lender and loan agreement. Before making a part-prepayment, check the applicable conditions and understand how the payment will affect your repayment schedule.

Part-prepayment is different from foreclosure. Foreclosure means repaying the entire outstanding loan amount at once and closing the loan account. With part-prepayment, you repay only a portion of the outstanding principal, so the loan remains active and you continue paying EMIs. Depending on the lender's available options, you may be able to reduce your EMI amount or shorten the remaining loan tenure after the part-prepayment. The applicable option depends on your loan terms and the lender's process.

Rules that apply to part-prepayment

Part-prepayment is usually allowed on most loans, but a few conditions typically apply and can vary by loan type. Before making one, it helps to check:

• Whether there is a minimum amount required for a part-prepayment to be accepted
• Whether there is a limit on how many part-prepayments you can make in a year
• Whether a lock-in period applies, during which part-prepayment is not allowed
• Whether your loan has a fixed or floating interest rate, since this affects whether a charge applies
• Whether the prepaid amount is adjusted to reduce your EMI, your tenure, or based on your preference

These terms may vary based on your lender and loan type. Check the applicable conditions for your loan account before making a part-prepayment to understand the process and any applicable charges. 

Loan part-prepayment can usually be made through the Bajaj Finance app, website, or by visiting a branch, depending on your loan type and the amount involved.

Follow these steps: 

1. Log in to the Bajaj Finance App or website using your registered mobile number or Customer ID.
2. Go to your active loan account and select the 'Part-Prepayment' option, where available.
3. Enter the amount you wish to prepay, ensuring it meets any applicable minimum prepayment threshold.
4. Choose your preferred repayment adjustment option—either reducing your EMI amount or shortening your remaining loan tenure.
5. Select a payment method (Net Banking, UPI, or Debit Card) and complete the transaction.
6. Check your updated loan statement and revised schedule to verify that the principal balance and EMI/tenure have been adjusted accordingly.

If the option is not available online for your loan type, you can visit a branch or contact customer care to complete the part-prepayment.

Understanding part-prepayment charges and loan impact

Whether a part-prepayment charge applies, and how the extra payment affects your loan, depends largely on whether your interest rate is fixed or floating. The table below outlines the general pattern.

The exact charge, if any, and the minimum or maximum amount allowed for part-prepayment depend on your specific loan agreement. Confirm these details on the app, website, or with customer care before proceeding.

Why timely repayments matter even without prepayment

Part-prepayment is optional and depends entirely on having surplus funds available. Making one is not necessary to keep your loan account in good standing. What matters for your credit record is paying your regular EMI on time, whether or not you ever make a part-prepayment. If you are unable to prepay, continuing your standard EMI schedule keeps your loan account current and your CIBIL record unaffected. On the other hand, missing a regular EMI, regardless of any prepayment history, is recorded as a default and affects your credit score. A bounce charge or late payment charge may apply as applicable if an EMI is missed. Part-prepayment is a way to reduce your loan faster when you have extra funds, but it is your regular, on-time EMI payment protects your credit record over the life of the loan.