Paying off a loan over 15–20 years can feel endless.
But what if we told you a simple tweak could save you ₹3–5 lakhs or more?
At Vizzve Finance, we believe in smart borrowing — and that includes smart repayment.
Let’s break down how loan prepayment works — and how you can use this powerful trick to slash your interest burden.
📉 What is Loan Prepayment?
Loan prepayment means paying an extra amount towards your loan principal, either:
As a lump sum (part-prepayment)
Or closing the entire loan early (foreclosure)
This reduces your outstanding principal, which in turn reduces the total interest you’ll pay.
💬 Vizzve Insight: Even a ₹50,000–₹1 lakh prepayment can reduce your loan tenure by months or years.
🎯 The Trick: Prepay Early, Not Late
Why it matters:
Your EMIs are interest-heavy in the early years.
So, prepaying in year 2 saves much more than in year 10.
| Example: ₹10 Lakh Loan @ 9% for 20 Years | No Prepayment | ₹1L Prepaid in Year 2 |
|---|---|---|
| Total Interest | ₹11.58 lakhs | ₹9.94 lakhs |
| You Save | — | ₹1.64 lakhs |
✅ Prepaying in the first 3–5 years = maximum interest saved
💰 Where to Get Money for Prepayment?
Annual Bonuses or Appraisals
Tax Refunds
Maturity from FDs or RDs
Side Hustle Income
SIP Redemption (if it makes more sense than loan interest)
📲 Use the Vizzve Prepayment Calculator to see your savings instantly.
📅 Best Prepayment Strategies
🔹 Strategy 1: One-Time Lump Sum
Use bonus or inheritance to prepay ₹1–2L in one go.
🔹 Strategy 2: Regular Top-Ups
Add ₹1,000–₹5,000 to your EMI monthly.
Feels small, but saves big over time.
🔹 Strategy 3: Annual Prepayment Plan
Prepay once a year with tax refund, dividend, or Diwali bonus.
🧾 Prepayment & Charges: What to Watch For
Floating-Rate Loans: 🟢 No prepayment charges (RBI rule)
Fixed-Rate Loans: 🔴 May have 1%–2% charges — check loan agreement
Foreclosure: Some banks ask for written notice 1 month in advance
Part-Prepayment Limit: Some lenders cap prepayments per year
🛡️ Vizzve Finance Tip: We offer zero-prepayment penalty options through our loan partners.
🧠 When Should You Prepay?
| Your Situation | Prepay? |
|---|---|
| Loan interest > Investment returns | ✅ Yes |
| You’re nearing end of loan tenure | ❌ No (little interest left) |
| You plan to refinance | ✅ Consider prepay + refinance combo |
| You’re building emergency fund | ❌ Fund that first |
🛡️ Vizzve Finance = Smart Loan + Smart Exit
We don’t just help you get a loan. We help you get out of it faster:
📉 Prepayment-friendly lenders
🧮 In-app EMI and prepay calculator
📲 Alerts when you’re eligible for interest-saving moves
👨💼 Human advisors + AI insights
🧾 Transparent contracts, zero jargon
🎯 With Vizzve, you borrow smart — and finish smarter.
💬 FAQs
1. Can I prepay any loan?
Yes — especially personal loans, home loans, and vehicle loans. Just check for charges if it’s a fixed-rate loan.
2. Will prepayment reduce EMI or tenure?
Most lenders let you choose. Reducing tenure saves more interest.
3. How often can I prepay?
Many lenders allow once every 3 months. Vizzve partners offer more flexible terms.
4. Is it better to invest or prepay loan?
If your loan interest is higher than expected investment returns, prepaying is smarter.
🏁 Final Words: Slash Debt, Don’t Stretch It
A loan is a tool — not a trap.
The longer you stretch it, the more you pay.
But with a few smart moves early on, you can finish years ahead and save lakhs in interest.
👉 Use your income growth to cut your debt, not extend it.
Start small. Start early. Start with Vizzve.
Published on : 17th July
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.