A personal loan has become synonymous with everyday life for most people. Whether buying equipment, going on vacation, starting a business, or meeting emergency expenses, a personal loan is the easiest way to meet your needs and arrange for emergency expenses.
In recent times, getting a personal loan approved has become a much simpler process. You can easily get a personal loan with minimal documentation. Having said that, you need to have a precise understanding of how to repay your loan quickly. Planning your repayment strategy wisely not only saves valuable time but also improves your overall financial position.
Look at these easy ways to repay your loan faster.
What is the pre-payment penalty on pre-closure of a personal loan?
If you close your loan earlier than expected, most banks charge a prepayment penalty. The amount of the penalty is calculated as a percentage based on the existing loan balance or the loss of interest to the lender due to pre-closure. Generally, the pre-payment penalty ranges between 2% and 5% of your loan amount. The exact fee may vary between lenders.
Remember that all the details regarding the prepayment penalty and the terms that apply to this penalty are described in detail in your loan agreement. Make sure you read all the agreements thoroughly before signing them.
There are two ways in which you can try to avoid paying the prepayment penalty. First, look for a lender that doesn't charge a penalty for pre-closure. Second, choose a lender that allows you to pay off your loan penalty-free after a specific point in the tenure.
What are the documents required for loan pre-closure?
Certain documents need to be exchanged between the lender and the borrower in case of loan pre-closure. Make sure you have all these documents with you as they are proof that you have repaid your loan.
Documents to be submitted to the lender:
-All relevant loan documents
-Bank details showing the EMI payments made so far.
-Documents to be collected from the lender:
-Receipt of pre-close payment
-No Objection Certificate (NOC) for Personal Loan Closure
-Personal loan closure certificate
-Payment due certificate
You may want to ask your lender for an accurate list of documents required as per their process.
How to apply for a personal loan?
Read on to understand how to apply for a personal loan from Poonawalla Fincorp by checking your loan eligibility using our online calculator.
With a good CIBIL score, you are more likely to get a personal loan. Below are the steps to apply:
1. Fill out the Application Form:
Start by filling out the application form first. Ensure that the personal, employment and financial statements provided are accurate to the best of your knowledge. Your PAN and Aadhaar details will also be required to proceed to the next step.
2. Select Loan Amount:
Enter the loan amount you require, as well as the repayment period that is convenient for you. Our Personal Loan EMI calculator will help you understand how you can choose a tenure so that your monthly EMI amount can be easily managed within your budget.
3. Submission of Documents:
Your identity along with your financial status will need to be verified before your loan application can be approved or rejected. This helps to ascertain whether you meet the eligibility criteria. Documentation includes:
While it has become common practice to meet high-value consumption with the help of personal loans, it is also essential for the borrower to know how to repay his loan in simple and easy steps. Ultimately, the aim is to reduce your debt obligation while building your financial stability
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