Personal Loan Prepayment Calculator

Personal Loan Prepayment Calculator

Save the interest amount and live your life swiftly without any stress! Prepayment of a personal loan simply means paying the principal amount before completing your loan tenure. You can partially or completely pay the principal amount.

You can also use the Urban Money personal loan prepayment calculator for understanding the EMI, the interest rate of prepayment, and other mandatory factors.

Personal Loan Prepayment Calculator Benefits

The personal loan prepayment calculator benefits are as follows:

• Free from Debt Easily

To live a debt-free life without any stress, you can collect some amount and deposit it as a prepayment of the principal amount of your loan. Prepayment of personal loans also helps reduce EMI costs as the principal amount will be reduced by some percentage.

• Lower the Burden

Prepayment of personal loans does not mean that you have to pay the complete amount at once. You can prepay your loan amount partially as well. Though you won’t be able to save any amount on the interest, the debt will be a lot less that way. Prepaying your outstanding loan also decreases the unpaid principal amount. Thus, the EMIs will be down on the prevailing interest amount.

Prepayment of personal loans does not mean that you have to pay the complete amount at once. You can prepay your loan amount partially as well. Though you won’t be able to save any amount on the interest, the debt will be a lot less that way. Prepaying your outstanding loan also decreases the unpaid principal amount. Thus, the EMIs will be down on the prevailing interest amount.

• Save on Interest Amount

You must have sufficient funds to repay the complete loan amount in the earlier days of your tenure. Most banks and financial institutions have a one year lock-in period. It means that you cannot repay your loan amount partially or completely for a year. However, once the one year period is over, you can prepay the outstanding loan and save a good amount.

How Does a Personal Loan Prepayment Calculator Work?

A personal loan EMI calculator with prepayment helps revise the loan prerequisite of EMI. The prepayment personal loan calculator requires you to enter the loan amount, the tenure, and interest rates in its required fields.

If you are already repaying for a personal loan, the personal loan prepayment calculator would require the remaining loan amount, EMIs paid to date, the prepayment amount, interest rate, and tenure of your loan. You will learn how much money you will save on the EMIs using a personal loan EMI calculator with a prepayment option.

How to Use the Urban Money Prepayment Calculator?

You can use the Urban Money personal loan prepayment calculator by following the steps below:

Step 1: Enter the numbers and set a principal loan amount.

Step 2: Enter the time period for which you want a loan.

Step 3: Enter the interest rate of your preferred bank.

Step 4: Choose the Part Payment Amount.

You will now see the personal loan pre-closure calculator displayed on your screen and the revised tenure.

Factors Affecting Personal Loan Prepayment

The factors affecting personal loan prepayment are as follows:

• Tax Benefits

The Income Tax Act, under Section 80C, allows Rs. 1.5 lakh from tax deduction annually. However, if you are doing full prepayment, you won’t be able to avail any tax benefit. But, if you opt for partial prepayment, the tax benefits will decrease considerably.

• Rate of Interest

The interest rate on personal loans is higher than that of home loans. This is why it is advisable to prepay the principal amount of your personal loan. You can use the personal loan prepayment calculator and calculate the rate of interest e to pay either partial prepayment or full to free yourself from debts.

• Ideal Time in the Tenure

Prepayment of personal loans reduces the interest being charged on your principal amount. You can easily use the prepayment calculator for personal loans and see the outflow of interest. However, the interest will be higher in the initial years of your loan tenure. Thus, you must prepay the loan in the initial years. Also, if you prepay the amounts later, you won’t be able to enjoy several benefits.

• Charges Levied on Prepayment

If you prepay the principal amount, you will be charged 2% extra for the prepayment. Banks and other financial institutions levy these charges to safeguard them from the loss of interest they would have earned in the future.