When you make part-prepayments of your Loan Against Property amount, you volunteer to repay a part of your loan amount in advance, that is, before your predetermined EMI as per your repayment schedule. You may choose to do this when you have surplus funds and would like to either reduce your EMI amount or the remaining tenure on your loans.
Note that making part-prepayments is not the same as loan foreclosure, as the latter means that you repay the entire outstanding loan amount in one go, before the end of your repayment tenure.
If you are thinking about prepaying a portion of your Loan Against Property, understanding the benefits of this step can guide you towards making an informed decision.
- Higher Savings: One of the advantages of making part-prepayments is that you decrease your total repayment amount, which also means that you may be charged lower interest on your remaining loan balance.
- Boosts Repayment Capacity: By making part-prepayments on your ongoing Loan Against Property, you work towards freeing up your repayment capacity which can allow you to have more cash at your disposal for other financial expenses you may have.
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