Skip to content

NOOBFEEDS

Tech for innovators.

Menu
  • Finance
  • New In Tech
  • Tech for Innovators
  • Business
  • About
  • Stocks Tips & Recommendations
Menu

Know, what is the effect on the credit score of closing the personal loan ahead of time?

Posted on February 10, 2021February 9, 2021 by Nidhi Malviya

There are three ways to repay a personal loan. Regular closure, pre closure, part payment. Information about these three methods should be taken from the bank while taking a personal loan.

Taking a personal loan is considered the best option in case of sudden need of money. While taking a personal loan, information about pre-closure and part payment or partial payment must be taken. Today we will tell you about these two. Actually, personal loans can be closed in three ways.

Regular closure

This customer pays EMI every month. EMI is closed after payment in full.
After the last installment of the loan, the bank should be approached for loan closure.
You can also talk to customer care for this. Apart from this, talks can also be done through mail.
Pre closure

When a person pays a loan before the end of the loan term, it is called pre closure.
Some institutions charge pre-closure of loan.
There are different lock-in periods in banks, before which one can close the loan.
Banks charge a pre-closure charge to cover the loss on the interest amount.
Banks have different rules regarding this
Many banks do not charge any charges for pre-closure.
If you want to do a pre closure then you should talk to the bank.
Partial payment

If you want the loan to be paid as soon as possible, then partial payment can be made in between.
Partial payments have two advantages: your EMI will decrease or the loan period will decrease.

What is the effect on credit score

Keep in mind that banks also charge for partial payment or prepayment closure, so the net profit in interest is much higher than that charge.
Experts say that the immediate effect of pre-closure is not visible, but in the long run it has a negative effect on the credit score.
This option can be chosen if your credit score is already very good.
If your credit score is improving then pre-closure should be avoided in that condition.

Nidhi Malviya

Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *




  • Documents required for home loans (Complete list here)
  • Binance crypto TradingBinance: You Are 3 Steps Away from Crypto Trading
  • PAN cardAfter marriage, surname change has to be done in PAN card, in this way update name follow this easy process
  • Unemployed are getting a government job in lieu of an application of Rs 1280! Know the truth of this news
  • LIC IPOLIC IPO Update: LIC appoints Sunil Agarwal of Reliance Nippon Life Insurance as CFO before launching IPO

Looking For Something

Let’s Connect

  • Instagram
  • Twitter
  • Facebook

Navigate

  • ABOUT
  • Privacy Policy
  • Contact Us

Pages

  • ABOUT
  • Contact Us
  • Our team
  • Privacy Policy
  • Stocks Tips & Recommendations
  • Terms Of Service