Ashok has only 5 more months to finish the interest payment to his personal loan. Surprisingly, he receives a sum of 50 thousand with which he plans on closing the loan immediately, before 5 months. Is it a good move actually? There are a lot of instances of closing the loans prior to the tenure closure. It is basic that we develop a certain itch to close the loan fastly when you are in the ending months. The sudden influx of money doesn't justify you closing the loan fastly. What you need to know is, you need to think twice before closing the loan beforehand. Because it is one headache less, isn't it? But before you finish off your loan, you need to need to make sure that you have all your financial requirements covered.
You can pay off loans before the due date. Make sure these points.
- Prioritize your needs
If you get a lump of money immediately, don't rush. Save some for household activities like groceries, rent, electricity bill,s etc. Have something for your home.
- Save
Open a savings account. Saving for the future is very necessary. You can even slowly fill out your loan. There's enough time left. You can even take it till the last month. It's legitimate. But don't throw all the money. Save some. It will be very helpful in times of need
- Prepayment fees
There are still some banks that charge prepayment fees. So make sure you don't fall into that trap also.
- Don't retire
Some people retire early to use the money to fulfill the loans. Never do it. It's not worth it. At least, don't retire just for the sake of foreclosing the loan.Paying off your loan early may sound good. But do it only if you're financially well stable. Otherwise, it is advised to pay the personal loan or gold loan interest rate till the end of the loan payment.
Must Read:- Things to Consider Before Applying for a Personal Loan
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