Personal loans can come in handy in the situations of dire financial need such as emergency health treatment, house repair, wedding, etc. However, when you have surplus money in hand, you should consider pre-closure of your personal loan and be free of it.
Most banks allow you to pre-close a personal loan by paying the outstanding amount, any time after six installments. However, pre-payment penalty is charged on doing so.
Pre-closure of personal loan may not be a herculean task. However it is important that you understand the process right when you are taking a personal loan from a bank, as it may differ from one bank to another.
Some of the basic steps you can follow while pre-closing a personal loan are:
Clearing off personal loans gives a mental boost as it relieves the financial burden that you carry every month. Calculations may help you decide whether paying off a personal loan early is a good idea or not, however it is your individual choice if you want to save your money on interest or get back your peace of mind.