Prepaying a loan feels like a financial win:
🎉 Fewer EMIs.
🎉 Less stress.
🎉 Interest savings.
But not all prepayments are smart. Before you rush to clear that balance, Vizzve suggests asking yourself these 4 key questions.
❓ 1. Are There Prepayment Charges?
Some lenders charge a penalty for early closure—especially for:
Fixed-rate loans
Personal loans from NBFCs
Loans closed within the first 6–12 months
✅ Vizzve Tip:
Check your loan agreement. If fees exceed interest savings, it’s not worth it.
❓ 2. Will You Still Have an Emergency Fund Left?
If you're using:
Your savings
Fixed deposit
Emergency cash
...make sure prepayment doesn’t leave you financially exposed.
✅ Vizzve Tip:
Always keep at least 3–6 months of expenses untouched—even after prepayment.
❓ 3. How Much Interest Will You Actually Save?
Loan interest is front-loaded (you pay more interest in early EMIs).
So:
Early prepayment = big savings
Late prepayment = little impact
Use Vizzve’s loan calculator to check if the savings justify the effort.
✅ Example:
If you’re in the last 20% of EMIs, most of the interest is already paid.
❓ 4. Will This Affect Your Credit Profile?
Prepayment can:
✅ Improve credit score (if done cleanly)
❌ Slightly reduce score (if you close the only active loan—less credit history)
✅ Vizzve Tip:
If you plan to take a home/car loan soon, keeping a small loan active may help your credit mix.
🧾 Quick Summary: Should You Prepay or Not?
| Situation | Prepay? |
|---|---|
| You're early in the loan cycle | ✅ Yes |
| You have extra income/surplus | ✅ Yes |
| You're using emergency funds | ❌ No |
| You're close to end of loan | ❌ Not necessary |
| Lender charges big penalty | ❌ No |
💬 FAQ: Prepaying Your Loan
Q1. Can I partially prepay a personal loan?
Yes, most NBFCs and digital lenders allow part-payment. Check your lender’s terms.
Q2. How often can I prepay?
Some allow only once a year; others allow anytime after 6 EMIs.
Q3. Will prepayment lower my EMI?
Not always. It may reduce your loan tenure instead. Ask for a restructure if needed.
🔍 Final Verdict from Vizzve
Prepayment can bring freedom—but only if it’s done smartly.
Always consider the math, your liquidity, and your financial goals.
With Vizzve, you're not just repaying loans—you’re mastering them.
Vizzve Finance – Empowering Your Loan Decisions, Not Just Funding Them.
Published on : 12th July
Published by : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.