Advantages of choosing to pay for Personal Loan before Tenure

There are abundant options available for loans in the market. A loan is when you give money on credit to a person, and that person will give back the money he owes in tenure. There are many loan policies available in the vast financial market. Syndicate Bank Personal Loan is among the top in the market.

Tenure is the total number of months or an agreed period, usually in months and years, which is agreed between the lender and the borrower. Where the borrower is obliged to pay the borrowed money in monthly instalments, and the borrower has to pay back the principal amount along with interest. An unjustified tenure will lead to expendable consequences such as prolonged loan payments, wrong EMI, additional interest rate.

Usually, the tenure for a personal loan is five years. In comparison with other loans in the market, a personal loan has the most tenure. While others range till three years, a personal loan tenure only has five years.

Repaying what about taking is the senior-most important thing to do, when it comes to other loans, banks or any financial institutions lending money they ask for a property to keep as a guarantee of money, for example, people can keep the deed of their house, car ownership document etc, and in the case where the borrower is unable to make the payments on time and if the outstanding dues come to limit the bank itself can take over the ownership of that particular property. If a person has been added to the defaulter, then he or she can request for changing the tenure and interest.

Advantage of prepayment of personal loan:

• Prepayment will help to reduce the interest payment.
• Help to bring down the outstanding amount.
• Prepayment of a personal loan will boost the credit score.
• Pre-closing the loans doesn’t have a negative impact on the credit score.
• When you pay in a lump, then only the pre-part payment works.
• Usually, a prepayment can be done only after a year. It is a default for all tenure.

Most banks allow prepaying after one year. The main advantage when you choose to prepay the entire amount is that you won’t have to pay the entire interest.

For example :

Taking a loan worth 3 lakh, at an interest rate of 15% p.a for five years, processing fee of 2%, after calculating through a Personal Loan EMI Calculator, will be Rs 7,137. Accordingly, you will be paying Rs 35,529 as interest, and if the outstanding amount is paid now then, Rs 57,049 will be saved.

Some banks charge an additional foreclosure penalty. These penalties range from 2%- to view how much one is saving and how much is a loss, one can use an online personal loan EMI calculator.

Some of the procedures to apply for fore disclosure are :
• Contact the branch where you have taken the loan from.
• Make a visit with the bank with the documents required.
• Have a meeting with the relationship manager and request for prepayment of the loan account.
• The loan officer will then do the final calculations and give you an amount that you have outstanding(if applicable ) and the total interest to pay.

Conclusion:

When the payment is made on period, this also makes a much better reputation for you and also reflects a credit score on the account. The personal loan also helps you in every situation to use the amount because nowadays some of the people's needs are escalating, they can easily trust this loan because the only personal loan here requires very little documentation work. Paying the tenure amount early brings a lot of supremacy.