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Personal Loan

Prepaying Your Personal Loan: What You Need to Know

Summary: ZERO foreclosure fees and a cost-effective, smooth borrowing process can help you save a good amount of money, and avoid hassles. Read on to learn about a smart Personal Loan that does not involve any foreclosure charges!

29 May 2024 by IDFC FIRST Bank
prepayment of personal loan
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Personal Loans can make managing financial expenditures quite easy, which is why this credit option is a common one. You can access funds quickly without worrying about pledging any collateral to the lender while also getting flexibility in terms of loan proceeds, usage, and repayment. Now, while there are various repayment plans that you can choose from, you might look to foreclose your Personal Loan to be debt-free as soon as possible. This is where you might usually get charged with a fee, which is called as a foreclosure charge. Both Salaried and Self-Employed Individuals can apply.

While foreclosure charges on Personal Loans might have been the norm, today, you have the option of not incurring this unnecessary charge which simply increases the cost of your loan. How? This is where FIRSTmoney comes in – an industry-first smart personal loan offered by IDFC FIRST Bank featuring a host of benefits that you’ll learn about in this blog. A key feature of this smart Personal Loan? It does not include any foreclosure charges!

READ MORE

Personal Loan on an Aadhaar Card
Personal Loan on Aadhar Card
Personal Loan Eligibility Criteria
Looking for a Personal Loan? Here are 5 criteria you must meet

 

Benefits of a FIRSTmoney loan

 

  • ZERO foreclosure charges


    • The first benefit of this smart personal loan would be the ‘no foreclosure charges’ feature. You can choose to repay the loan in full prior to your repayment schedule without incurring any additional charges.

  • IDFC FIRST Bank’s FIRSTmoney offers immediate loan approvals and quick disbursals


    • Once you apply for a FIRSTmoney loan by submitting your application online, IDFC FIRST Bank ensures a swift approval and disbursal process after successfully verifying your documents. Once you get your loan amount sanctioned, you can immediately start withdrawing funds whenever required.

  • One-time setup of your sanctioned loan amount without any maintenance charges


    • Once your personal loan is sanctioned based on your creditworthiness, you can start using this loan without worrying about any maintenance charges! All you need is to pay a one-time processing fee at the time of loan application. 

  • Easy on demand loan 
     

    • With FIRSTmoney, you enjoy an immense convenience to apply for additional loan with just a few click. It is really helpful in cases of emergencies where you need instant access to extra cash.

    The FIRSTmoney loan not just eliminates foreclosure fees but features instant loan approvals, flexible fund usage, a competitive interest rate, a 100% digital process, as well as repayment flexibility.

    Steps to apply for FIRSTmoney smart Personal Loans


    So, here’s how you can apply for a FIRSTmoney smart loan in 5 easy steps:

    • Start by scanning the QR code or clicking loan from your smartphone.
    • Register using your mobile number and confirm basic/personal details to check your eligibility.
    • Select the loan amount of your choice and choose flexible repayment terms.
    • Link your bank account where you wish the funds to be disbursed.
    • Complete the video KYC verification process with your physical PAN card.

    Final thoughts


    Opting for the FIRSTmoney loan with no foreclosure charges offers a cost-effective borrowing experience along with flexible EMI repayment plans. With FIRSTmoney’s quick approval process, competitive interest rate at 10.99%, and borrower-friendly features, this credit option stands out among its counterparts in the market. Applying for this smart personal loan which features zero foreclosure charges means that you can opt to foreclose the loan before the scheduled repayment date without worrying about any additional charges. This way, you can manage your finances efficiently and plan for a stable and secure financial future. Do note that you need to have a good credit score (730 or above). Both Salaried and Self-Employed Individuals can apply. 

    Considering prepaying your instant cash loan? IDFC FIRST Bank provides insights into the pros and cons of early repayment. While it can save on interest, understanding any associated charges is crucial.

    Explore our options for ₹70000 personal loan, and ₹80000 personal loan.

    Frequently Asked Questions

    Is it good to foreclose a personal loan?

    Foreclosing a personal loan can be beneficial if you have excess funds and want to save on interest costs. By foreclosing, you pay off the outstanding principal before the end of the loan tenure, thus reducing the total interest paid. However, banks may charge a foreclosure fee, so it's essential to check the terms and conditions of your loan agreement. Evaluate the foreclosure fee against the interest savings to determine if it's financially advantageous.

    With a FIRSTmoney smart personal loan, you enjoy the zero-foreclosure charges which lets you repay your loan amount in full and close your loan whenever you wish. 

    What happens when you prepay a loan?

    When you prepay a loan, you make an additional payment towards the principal amount, reducing the overall loan balance. This action can lead to a decrease in the total interest paid over the loan tenure. Prepaying a loan can shorten the loan term, lower the EMI (Equated Monthly Instalment), or both, depending on the bank's policy and your preference. Always confirm any prepayment penalties or conditions with your bank. With FIRSTmoney, you enjoy the flexibility of prepaying your loan without any foreclosure charges, helping you save on interest and achieve financial freedom faster.

    Does prepayment reduce EMI?

    Prepayment can reduce your EMI if your lender offers this option. By reducing the principal amount, the interest component of the EMI decreases, resulting in lower monthly payments. Alternatively, you can opt to maintain the same EMI and shorten the loan tenure. Discuss with your lender to understand their specific prepayment options and choose the one that best suits your financial situation. With FIRSTmoney, you have the flexibility to choose how to apply your prepayment - reduce your EMI or shorten your loan tenure.

    Does prepayment reduce interest?

    Yes, prepayment reduces the total interest payable on the loan. Since interest is calculated on the outstanding principal, reducing the principal amount through prepayment decreases the interest component. Over time, this can result in substantial savings, especially for long-term loans. Ensure you understand any prepayment penalties that might offset these savings before proceeding. FIRSTmoney offers zero foreclosure charges, ensuring you get the maximum benefit of your prepayment.

    Does early payoff hurt credit?

    Early payoff of a loan does not hurt your credit score. In fact, it can positively impact your credit score by demonstrating your ability to manage and repay debt responsibly. Successfully closing a loan early reflects positively on your credit history. However, ensure that the lender reports the closure correctly to credit bureaus to avoid any discrepancies. With FIRSTmoney, you have the freedom to prepay your loan without any foreclosure charges, helping you improve your financial health and potentially boost your credit score.

    Disclaimer

    The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

    The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

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