Tired of paying monthly EMIs and looking for ways to close your loan early? You're not alone. Loan prepayment can help you save thousands in interest and achieve financial freedom sooner.
In this Vizzve guide, we break down what loan prepayment means, how it works, and how you can make the most of it.
🔍 What is Loan Prepayment?
Loan prepayment means paying off your loan (fully or partially) before the original tenure ends. It can be done in two ways:
✅ Part-Prepayment: Paying a lump sum (less than total outstanding)
✅ Foreclosure: Paying off the full outstanding amount at once
Both options help you reduce your overall interest burden and/or EMI duration.
🧮 Example: How Prepayment Saves You Money
Let’s say you took a ₹5,00,000 personal loan for 5 years at 12% interest.
Without prepayment: Total interest paid = ~₹1,66,000
If you prepay ₹1,00,000 in the 2nd year: You save ~₹30,000–₹40,000 in interest!
That’s a big deal — and Vizzve can help you track and time it perfectly.
📊 Benefits of Loan Prepayment
| Benefit | Description |
|---|---|
| 💸 Save Interest | Pay less overall by reducing principal early |
| 📉 Lower EMIs or Tenure | You can choose to lower your EMI or shorten the loan period |
| 📈 Boost Credit Score | Early repayment shows financial discipline |
| 🧘♂️ Less Financial Stress | Peace of mind with less debt burden |
⚠️ What to Check Before Prepaying
1. Prepayment Charges
Some banks charge 1%–3% on the amount pre-paid.
Vizzve’s partner lenders offer low or zero charges.
2. Minimum Lock-in Period
Some loans can only be prepaid after 6–12 months. Check your loan agreement.
3. Savings vs Investment
Sometimes, investing that money gives better returns than prepaying. Do the math with Vizzve’s Loan vs Investment Calculator.
✅ Vizzve Makes Prepayment Simple
With Vizzve, you get tools and insights to manage your loan smartly:
🧮 Prepayment Calculator – See how much you save
📆 Timely Alerts – Know when to prepay for max benefit
🔍 Lender Comparison – Choose low-penalty prepayment lenders
📲 Track in-app – Full transparency of principal vs interest left
💬 “A smart borrower doesn’t just repay – they prepay wisely.” – The Vizzve Way
🔁 Should You Prepay or Invest?
| Scenario | Action |
|---|---|
| Interest rate > 12% | ✅ Prepay the loan |
| Loan tenure remaining < 1 year | ❌ Better to continue EMIs |
| You have surplus cash + emergency fund | ✅ Prepay part or full |
| Market returns > loan interest | 🟡 Consider investing instead |
💡 Pro Tips to Maximize Prepayment Savings
Prepay early in the loan tenure – interest savings are highest in the first half.
Part-prepay yearly if possible – use bonuses or tax refunds.
Use EMI calculators to plan in advance.
Don’t compromise your emergency fund to prepay.
📌 Final Thoughts
Loan prepayment isn’t just about paying off debt — it’s about taking control of your financial life. Whether you're looking to reduce stress, save on interest, or boost your credit score, Vizzve helps you do it right.
Don’t wait. Even one prepayment can make a huge difference. Try the Vizzve Loan Tracker today.
🔖 FAQs –
Q: Is loan prepayment allowed on all loans?
Yes, but some loans have lock-in periods. Always check terms before proceeding.
Q: How much interest can I save by prepaying?
Depends on timing and amount. Early prepayment saves the most.
Q: Does Vizzve charge prepayment fees?
Vizzve partners with lenders who offer low or zero prepayment penalties.
Q: Will prepayment affect my credit score?
Yes – positively! It shows responsible credit behavior.
published on 1st July
Publisher : SMITA
www.vizzve.com || www.vizzveservices.com
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.