Benefits of Loan Prepayment
- Interest Savings: Reduce total interest paid over loan tenure
- Debt-Free Faster: Close your loan earlier
- Improved Cash Flow: Lower EMI after prepayment
- Peace of Mind: Reduced financial burden
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Prepayment Strategy
Prepay when you receive bonuses, tax refunds, or any lump sum amount. Even ₹50,000 prepaid annually can save lakhs in interest over 20 years.
When to Prepay
Prepayment is most effective in the early years of the loan when the interest component is highest.
Prepayment Rules by Loan Type
| Loan Type | Rate Type | Prepayment Penalty |
|---|---|---|
| Home Loan | Floating | Nil |
| Home Loan | Fixed | 2-4% |
| Personal Loan | - | 2-5% |
| Car Loan | - | 2-5% |