When you avail of a personal loan or any other, you need to repay it in EMIs over a scheduled tenor.
But what if you get a large amount from other sources and wish to repay the ongoing personal loan in one go? Is it possible?
Yes, that’s when the personal loan foreclosure comes into the frame. It is possible to do that by using the personal loan foreclosure calculator.
If you want to pay off your personal loan in one go, then you can know about loan foreclosure and personal loan foreclosure calculator in this post.
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What is personal loan foreclosure?
Personal loan foreclosure is when you make the full payment towards the remaining loan amount in a single payment. And it is done instead of repaying via EMIs. In other words, the personal loan foreclosure lets you repay the entire loan amount before the scheduled EMIs.
How to calculate your personal loan foreclosure amount?
When you wish to opt for the personal loan foreclosure, then you need to choose the number of EMIs that you have repaid. You also need to include the month you are looking to foreclose the personal loan account. This way, you will be able to arrive at the exact foreclosure amount. To do that, you can use the personal loan foreclosure calculator online. The tool is available free of cost on your lender’s site.
How can you use the personal loan foreclosure calculator?
On your lender’s website, open the personal loan foreclosure calculator. Enter the following credentials and calculate your precise foreclosure amount.
- Your availed personal loan amount
- Your loan tenor
- The applicable rate of interest
- The total number of EMIs that you have already paid so far
- The month in which you wish to foreclose the personal loan
What is meant by the personal loan foreclosure month?
The personal loan foreclosure month means a particular month in which you want to repay the entire loan amount in advance. Suppose if your personal loan tenor is 60 months (5 years), and you want to repay the full amount after 3 years and 4 months. In this case, the 40th month of your ongoing tenor is the foreclosure month.
Are there any penalty charges for foreclosing the personal loan?
Once you have paid at least 1 EMI towards your ongoing loan, 4% of your outstanding principal amount is what will be considered as your foreclosure charges.
Why is it good to foreclose the personal loan?
Foreclosing your loan will surely help you in the longer run. If you have surplus money to pay off the remaining debt, then you can always save. The savings that you will make will be the higher interest rate charged by lenders on personal loans.
- Increase your CIBIL score
Foreclosing a loan will have a lasting effect on the CIBIL score owing to your sound repayment history. This way, your next loan will be approved without hassles.
If you have funds, then the idea of personal loan foreclosure is smart enough to help you save money on interest charges. More than anything else, you will be free from the responsibility of the debt, and that’s a great feeling!
- Keep off from interest liability on your loan
During the tenor of your loan; you end up paying a considerable amount as interest charges. Hence, when you plan to foreclose it, then you are doing yourself good by keeping off your interest liability. This way, you can save big on interest charges.