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An Essential Guide to Preclosure Of Personal Loans

Personal Loan is a popular way for people to borrow money for many reasons like debt consolidation, home renovation, marriage expenses and much more. They have become popular amongst young professionals under the age of 35 years.

The best part about Personal Loans is that even with a minimum salary of Rs. 20,000, you are eligible to get one. Also, being unsecured in nature, Personal Loans do not require any collateral. Overall, when you borrow from one of the best Personal Loan lenders in India, you don’t have to stress about anything while taking the loan.

Meanwhile, when you decide to repay the loan before the completion of its tenure, you must adhere to the terms and conditions established by the lender. Notably, most lenders only permit pre-closures after a specified amount of time.

What is meant by Personal Loan Pre-closure?

When a borrower pays off a Personal Loan before its term is completed, the debt is said to have been preclosed. It relates to the loan’s principal sum. The borrower may benefit greatly in terms of savings from a loan preclosure. So, if you can repay the debt early, you can go ahead with the same. 

It’s crucial that you properly read the terms and conditions of the loan carefully and comprehend all the preclosure agreements. If you have any questions regarding loan preclosure, you can speak with your lender or use the ‘my loan app‘.

Pre-closure Procedure for Personal Loans

Personal Loan pre-closure is possible and the terms vary as per the lender. Nonetheless, it is crucial that you fully comprehend the procedure when applying for a Personal Loan as it may vary from one lender to another. Also, remember Personal Loans cannot be pre-closed online. So, you need to visit the lender’s branch office for the proceedings. 

Some fundamental procedures for pre-closure of a Personal Loan are

  • Ask for a pre-closure form and duly fill it.
  • A series of documentation must also be submitted to pre-close your loan.
  • After submitting all the required documents, you must make the payment.
  • The lending institution will provide you with an acknowledgment letter once you have completed all the steps, and this document needs to be securely maintained.
  • A few days after the loan is closed, you will get the loan agreement’s final closing.

Documents Required: 

  • All loan-related documents.
  • Identification documents like a passport, an Aadhaar card, a voter ID card, etc.
  • Loan statements that list the EMI payments made so far.
  • Payment draft or cheque.

The most significant benefit of paying off your debt before the term completion is that you become debt-free. You can save a lot of money by going ahead with the preclosure of your Personal Loan as you save on the payable interest on your loan.

Why Should You Get a Personal Loan?

  • Make the most of the adaptability – The adaptability of a Personal Loan is a crucial benefit as it can be used for any personal need. So, you can fund a wedding, education, travel, or medical costs and buy jewelry, electronics, and other items using the money you borrow.
  • Pre-approval is typically granted quickly. To receive a Personal Loan quickly, you must meet the eligibility criteria. In addition, a strong credit score is unquestionably advantageous. Disbursal typically takes around 24 hours, depending on the lender.
  • Minimal Documentation – Only a few necessary documents are needed for a Personal Loan approval. Due to this, obtaining a Personal Loan is easier and quicker. You can install your preferred financial institution’s ‘my loan app’ and upload scanned copies of your documents for verification.
  • No collateral to loan -You do not have to provide any collateral to get a personal loan. You can borrow money without losing ownership of your assets. Personal loans are considered the ideal option for those needing immediate cash because they are unsecured.
  • Adjustable repayment period – You are free to select the term based on your ability to pay. Most financial institutions have flexible repayment tenures of up to 60 months. 

So, avail yourself a Personal Loan today and enjoy the benefits mentioned in this article.

Conclusion

When facing financial difficulties, Personal Loans are nothing less than lifesavers. They are one of the most practical lending options with straightforward eligibility requirements, an uncomplicated application process, and instant release of funds.

Those looking to prepay their Personal Loan should understand the terms and conditions of the lender. Remember, most lending institutions charge a nominal penalty for prepayment of foreclosure of the loan. So, if your financial situation allows, you can go ahead with the pre-closure of your Personal Loan and become debt-free. 

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